Representative Joe Sestak | Representing the 7th District of Pennsylvania

Congressman Sestak Votes for Urgently Needed Stimulus Plan to Rebuild Economic Security

One of Four Key Pillars to Re-Vitalizing U.S. Economy

February 14, 2009

Washington, D.C. - To avoid a deeper and more protracted economic recession that would devastate the economic security of his constituents, while ensuring a more rapid recovery from the recession, Congressman Joe Sestak (PA-07) voted for H.R. 1, the American Recovery and Reinvestment Act of 2009, which passed the House by a vote of 246-183 and provides $787 billion in urgently needed stimulus funds. The legislation is a compromise between the House and Senate that begins to rebuild the economy and puts Americans back to work (including 143,000 new jobs in Pennsylvania) during the worst economic crisis since the Great Depression – an economy in which the housing market is in its worst state since the 1930s and turmoil in the financial markets threatens the long-term economic, health, education, and retirement security of millions of Americans. On January 28, 2009, the Congressman voted for the House version of this bill, which provided $819 billion in stimulus.

In January, 598,000 more Americans became unemployed-- for a total of 3.6 million lost jobs over the thirteen preceding months-- and the unemployment rate surged to 7.6%. Household net worth has fallen close to $13 trillion since peaking a year ago, primarily because of a 25% decline in house prices and a 40% decline in stock prices. Approximately 38 states are now in recession; retail sales, vehicle sales and industrial production are plunging downward; and a January increase in unemployment insurance claims suggest another monthly job loss of over 500,000. At the same time, state tax revenue growth has slowed as home sales, property values, and corporate profits have all fallen, which has led to a gap between state and local government revenues and their expenditures of over $100 billion—a record—in the third quarter of 2008.

In the 7th District, the current economic crisis adds to the fact that over the past eight years, health premiums have increased nearly 100%; education over the past six years at a public university has soared over 65%; and real income has not kept pace with inflation as over 50% of the District’s families have less real income today than in 2001.

“The global financial system – while edging back from the apex of panic in October – is still in a deep crisis of limited lending. Lost jobs, and the healthcare that comes with it, along with declines in real GDP, industrial production, and retail sales, have impacted all sectors of our economy and every household,” Congressman Sestak said. “For example, in my district, Crozer Chester Medical Center recently announced lay offs or consolidation of approximately 400 employees and their positions; a small family laundry business closed because it could not get a loan to repair equipment; a family-run sports store closed after 30 years in business; a 68-year old woman lost more than $100,000 in her retirement savings as the market crashed; and a father with a strong credit history could not get a mortgage for his family. Simply put: my constituents are very concerned about their family’s security, their future, and America,” continued Congressman Sestak.

“The immediate cause of this crisis was the collapse of the housing market and consequential surge in mortgage loan defaults. The billions of dollars in losses on these mortgages, banks’ unwillingness to extend credit, stock market declines, and the resulting cycle that is self-reinforced by a lack of consumer and investor confidence have led to circumstances not seen since the Great Depression.”

“Since I first voted for an economic stimulus bill in September, which the Senate failed to consider, and then the Emergency Economic Stabilization Act in October, I have called for the need to pass a second economic stimulus package. I believe that the cycle we are currently experiencing can only be broken by aggressive and relentless government intervention, and one of the ways is by a significant stimulus plan to provide both quick relief to individuals, businesses and state governments to pay their bills, and to give a strong boost to the economy. While it is clear that the market has responded to recent action -- from the Troubled Asset Relief Program and the actions of the Federal Reserve which put funding into both the credit and financial sectors, and resulted in residential mortgage rates declining; Libor (the rate banks lend money to each other overnight and to which every credit card in America is directly tied, as well as approximately 50% of all adjustable rate mortgages) falling, which is indicative that interbank lending is improving; and commercial paper rates also falling -- without the implementation of an aggressive stimulus plan, conditions will worsen quickly and further harm the economic security of my constituents, and all Americans,” said Congressman Sestak.

Therefore, the American Recovery and Reinvestment Act injects $787 billion (approximately 5% of GDP) into the economy through $282 billion in tax cuts for individuals and small businesses – providing 95% of American workers with an immediate tax cut -- and $311 billion in appropriations. This bill is designed to both provide quick relief and a significant boost to our economy. We must immediately salvage jobs that are hemorrhaging as states cut programs and payrolls, as are businesses; as well as give funding relief to cash-strapped citizens and businesses, and we must also invest in the job creation and tax relief programs that will generate the needed jobs of the future.

The spending provisions are designed to:

• Help Workers Hurt by the Recession by providing $24.3 billion for programs to train workers and help them find jobs, extending unemployment benefits, and increasing food stamp benefits, which generate an estimated $1.73 in near-term GDP for every dollar spent;
• Create 1.5 Million Jobs through Infrastructure Spending and Ensure our Economic Competitiveness with Science, Technology, and Innovation by providing $120 billion for infrastructure and science funding to rebuild our crumbling bridges and roads, provide new mass transit options for millions of Americans, modernize public buildings, provide investments in scientific research and a major investment in the nation’s IT network infrastructure.
• Lower Health Care Costs and Broaden Coverage through funds to increase the federal share of Medicaid costs (FMAP), establish a health information technology system, extend COBRA coverage, and allow states to temporarily cover jobless workers through Medicaid, which is expected to create more than 250,000 jobs in the health care industry and elsewhere;
• Invest in Education through $105.9 billion for school and college modernization; increase Pell Grants and higher education tax credits to make college more affordable- creating 250,000 jobs in education and related sectors; and also preventing teacher layoffs and education cuts by the states;
• Support Clean, Efficient Domestic Energy that will substantially increase renewable energy production and renovate public buildings, while creating more than 500,000 jobs.

While the stimulus will not immediately reverse the economic downturn, it will provide a vitally needed boost to the flagging economy and prevent what is now a serious recession from becoming a depression. It will help prevent even more lost jobs, small businesses shutting their doors, homeowners facing foreclosure, and a more severe budget deficit because of a greater decline in the economy generating less government revenues, which would mean greater budget outlays required for a longer period; the failure to pass this stimulus would mean GDP would not return to its previous 2007 peak by the beginning of 2011, but rather in 2014; and millions more would be unemployed by that time. In fact, the unemployment rate would be over 11.5% percent (11% marks an economic downturn as a depression) rather than 9% by the end of this year if the stimulus bill is passed.

Specifically for the 7th Congressional District, for one example, the stimulus provides:

Job-Creating Investments for Pennsylvania
 $1.6 billion through the State Fiscal Stabilization Fund to local school districts and public colleges and universities in addition to incentive grants as a reward for meeting key education performance measures and additional funding for other high priority needs such as public safety and other critical services, which may include education
 $426.6 million for Special Education Part B State Grants to help improve educational outcomes for individuals with disabilities, raising the federal contribution to nearly 40 percent, the level established when the law was authorized more than 30 years ago
 $25.4 million in education technology funds to purchase up-to-date computers and software and provide professional development to ensure the technology is used effectively in the classroom
 $523.8 million for Title I Education for the Disadvantaged to help close the achievement gap and enable disadvantaged students to reach their potential
 $15.4 million in State Employment Service Grants to match unemployed individuals to job openings through state employment service agencies and allow Pennsylvania to provide customized reemployment services
 $34.4 million in Dislocated Workers State Grants, particularly for grants that support immediate strategies for regions and communities to meet their need for skilled workers, as well as longer-term plans to build targeted industry clusters with better training and a more productive workforce
 $16.7 million for Department of Labor’s Adult State Grants
 $41.1 million for Department of Labor’s Youth State Grants
 $20.9 million for Vocational Rehabilitation to help individuals with disabilities prepare for and sustain gainful employment
 $66.2 million through the Drinking Water State Revolving Fund to address the backlog of drinking water infrastructure needs
 $157.6 million through the Clean Water State Revolving Fund to address the backlog of clean water infrastructure needs
 $1 billion in Highway Funding to be used on activities eligible under the Federal-aid Highway Program’s Surface Transportation Program and could also include rail and port infrastructure activities at the discretion of the states
 $343.7 million in Transit Formula Funding for investments in mass transit
 $213.2 million through the Public Housing Capital Fund to enable local public husing agencies to address a national $32 billion backlog in capital needs – especially those improving energy efficiency in aging developments – in this critical element of the nation’s affordable housing infrastructure
 $95 million in HOME Funding to enable state and local government, in partnership with community-based organizations, to acquire, construct, and rehabilitate affordable housing and provide rental assistance to poor families
 $90.4 million through the Homelessness Prevention Fund to be used for prevention activities, which include: short or medium-term rental assistance, first and last month’s rental payment, or utility payments. As such, most of this funding will go directly into the economy of local communities, as the funds will be used to pay housing and other associated costs in the private market
 $100.8 million through the State Energy Program
 $258.8 million through the Weatherization Assistance Program
 $3.4 million for National School Lunch Program Equipment Assistance
 $4 million through the Emergency Food Assistance Program
 $754.1 million in Supplemental Nutrition Assistance Program benefits (formerly Food Stamps)
 $3.8 million for the Emergency Food and Shelter Program, which provides grants to nonprofit and faith-based organizations at the local level to supplement their programs for emergency food and shelter to provide for the immediate needs of the homeless
 $60.1 million in Child Care and Development Block Grants to provide quality child care services for in low-income families who increasingly are unable to afford the high cost of day care
 $22.9 million for Head Start to allow additional children to participate in this program, which provides development, educational, health, nutritional, social and other activities that prepare children to succeed in school
 $42.6 million in Community Services Block Grants to local community action agencies for services to the growing numbers of low-income families hurt by the economic crisis, such as housing and mortgage counseling, jobs skills training, food pantry assistance, as well as benefits outreach and enrollment
 $2 million for Senior Meals Programs to help senior meals programs cope with steep increases in food and fuel costs. Many programs are reducing meal deliveries to seniors or closing meal sites
 $73.2 million in Byrne/JAG grants to support law enforcement efforts
 $1 million in Internet Crimes Against Children Grants to help law enforcement agencies enhance their investigative response to offenders who use the Internet, online communication systems, or other computer technology to sexually exploit children
 $6.4 million in Violence Against Women Grants for victim services programs to improve the criminal justice system’s response to violent crimes against women and to assist victims of domestic violence, dating violence, sexual assault and stalking who are in need of transitional housing, short-term housing assistance, and related support services

Extended Unemployment Insurance for Pennsylvania
 Unemployment in Pennsylvania stood at 6.7 percent in December 2008 (the last month for which we have data). The Department of Labor estimates that Pennsylvania could receive $275 million in new funding if Pennsylvania fully enacts the UI modernization incentives that the legislation would provide.
 According to the National Employment Law Project, this means that an additional $100 in unemployment insurance benefits will be offered to approximately 1.1 million Pennsylvania workers who have lost their jobs in this recession.

Tax Relief for Pennsylvania Families and Small Businesses
 Up to $400 for workers (or $800 for married couples) in the new Making Work Pay Tax Credit for 4.9 million Pennsylvanian workers and their families.
 $250 to Social Security beneficiaries, SSI recipients, and disabled veterans
 $2,500 for 138,000 additional families in Pennsylvania that will qualify for the new American Opportunity Tax Credit that makes college more affordable for 3.8 million families nationwide.
 Extended Bonus Depreciation and Small Business Expensing through 2009, allowing businesses that make capital investments to immediately deduct one-half the cost. Small businesses can immediately deduct 100 percent of the cost of these investments
 The American Recovery and Reinvestment Act of 2009 would protect over 26 million working families across the nation from the Alternative Minimum Tax, representing thousands of dollars in additional income taxes. According to the Congressional Research Service, 972,000 Pennsylvanians would be protected from the Alternative Minimum Tax in 2009.

While the expected benefits of this stimulus are great, without a stimulus circumstances are projected to worsen quickly. GDP would fall 4.2% in 2009 and another 2.2% in 2010, and Pennsylvania would face a $2 billion deficit shortfall this June. Approximately five million more homes would be lost in the next three years, and some eight million jobs would be lost from the peak in employment at the start of 2008, pushing – as noted above -- the unemployment rate to well over 11% by end of 2009. This would be much more severe than the early 1980s recession, which has been the worst downturn since the Depression.

And importantly, the failure to implement this stimulus would mean that consumer and investor confidence would further deride, as occurred in September, when the House failed to pass the first version of the Emergency Economic Stabilization Act and the stock market suffered an 8.8% free fall — its largest percentage decline since the 1987 crash. That market turmoil prior to Congress finally passing the stabilization legislation a few days later, gravely harmed investor confidence in the government’s willingness to act in a predictable and needed manner, turning a financial crisis into a financial panic. Similarly, if this Stimulus bill is not passed quickly – as markets have already built it into their expectations – and if it is also not explained clearly so that households and businesses are convinced it will work, then we will not begin to dissipate the dark mood pervasive in our economy, and thus will fail to stem the economic downturn.

“As we begin this new session of Congress in the midst of economic turmoil, our foremost priority must be to reduce the financial strains felt by millions of American families, while immediately stabilizing our economy. Since September, I have been dedicated to creating and supporting a stimulus package that balances short term investment with long term fiscal responsibility – a policy that ensures that not only our generation enjoys the fruits of a robust economy, but that the next generation is not burdened by a devastating debt. I believe that based on the compelling evidence, the future debt would be exponentially worse if no action is taken and therefore I joined 243 of my colleagues in supporting passage of this urgently needed stimulus,” said Congressman Sestak.

Congressman Sestak’s vote for passage of the American Recovery and Reinvestment Act is yet another example of his ongoing efforts to stabilize the economy since the first signs of this crisis emerged over a year ago. In February, when the Pennsylvania Higher Education Assistance Agency (PHEAA) alerted him that it had to stop making student loans because of the problems in the credit markets, the Congressman immediately wrote to the Secretary of the Treasury and Chairman of the Federal Reserve Board, asking for direct intervention, but Chairman Bernanke responded that the “most important contribution that the Federal Reserve can make … is to foster the restoration of more-normal functioning in financial markets more generally.”

Unfortunately, over the proceeding ten months, that proved wrong. Instead, what began with foreclosures in sub-prime mortgages, has now engulfed and devastated a growing number of financial institutions, causing a widespread credit freeze that affects his constituents, where lending has stopped because of the fear that mortgage-related securities held by banks may soon make these banks insolvent.
In October, to secure economic security, restore availability of affordable credit loans, and prevent further decline in the stock market, Congressman Sestak voted for the Emergency Economic Stabilization Act (after voting for it in September when it failed to have enough votes). While the Congressman believes that the passage of that bill was necessary to prevent an imminent collapse of the economy, its implementation has not been sufficient, and what was needed was further accountability and transparency in their effort.
“There have been serious policy missteps in the government’s implementation of the original TARP approval of $350 billion, including the decision of Secretary Paulson not to use the TARP funding for its original intent of purchasing distressed mortgage loans and securities, but rather solely for its capital insertion into banking institutions.  While providing capital was essential, abandoning the distressed asset purchases altogether was a mistake as, after his announcement of this, prices of those assets caved further.  This failure to provide clarity to the price of those assets by the government’s purchase of them -- or evenly conducting a reverse auction to set their prices -- resulted in a failure to attract private investment once their price became known by government investment, and once the value of institutions holding such assets could then also be determined -- and attract investors. That is why I recently voted for the TARP Reform and Accountability Act, law which moves a long way toward correcting this and other failures, including first and foremost the failure of the Treasury Department and the financial and banking industry to ensure accountability for the application of these funds. These accountability rules apply to all institutions that have received funding back to the commencement of the TARP program in October 2008,” said Congressman Sestak (The Congressman earlier sent a letter to Secretary of the Treasury Paulson in response to a December 2 Government Accountability Office (GAO) report which identified the same problems with TARP’s implementation that Congressman Sestak had independently highlighted in two previous letters to the Secretary; he also wrote to Speaker Nancy Pelosi in November to ask her to join him in demanding Secretary Paulson follow the accountability measures specified in the Stabilization bill and calling on the Democratic leadership to accelerate the assignments of positions on the Congressional Oversight Panel so that is could meet its requirements for supervising use of taxpayer funds. The final appointments were announced on Thursday 21 November, more than 6 weeks after the bill was originally passed by the House and Senate; Prior to his letter to Speaker Pelosi, Congressman Sestak also sent a letter to United States Attorney General Michael Mukasey requesting him to “conduct an appropriate and thorough investigation into any and all financial institutions, corporations, and individuals that are suspect of criminal action relating to our current economic crisis.”)

Meanwhile, Congressman Sestak has remained committed to the need for a comprehensive economic stimulus plan. The bill passed today by the House, and supported by Congressman Sestak, includes the detailed provisions listed below. In these provisions you will find bolded, the estimated impact of this investment on local school districts and broad support for the Commonwealth of Pennsylvania, and small businesses from data provided leading up to passage of the House-passed version of H.R. 1.  Examples of these are placed among the various provisions below, and are also summarized at the very end in Section X:

I. Tax Relief for Middleclass Families and American Businesses, and Tax Incentives for State Local Economic Development

The tax cuts in the American Recovery and Reinvestment Act will jumpstart the economy by returning money to the hands of 95% of American workers, and encouraging new job-creating investments by businesses large and small, that will transform our economy for years to come, such as in renewable energy and energy efficiency.  

Details:

a. Tax Relief and Support for American Families

“Making Work Pay” tax credit. The bill would cut taxes for more than 95% of working families in the United States. For 2009 and 2010, the bill would provide a refundable tax credit of up to $400 for working individuals and $800 for working families. This tax credit would be calculated at a rate of 6.2% of earned income, and would phase out for taxpayers with adjusted gross income in excess of $75,000 ($150,000 for married couples filing jointly). Taxpayers can receive this benefit through a reduction in the amount of income tax that is withheld from their paychecks, or through claiming the credit on their tax returns. This proposal is estimated to cost $116.199 billion over 10 years.
 Approximately 4.9 million Pennsylvanian Taxpayers are Expected to Benefit from the “Making Work Pay Credit.”
Increase in earned income tax credit. The bill would temporarily increase the earned income tax credit for working families with three or more children. Under current law, working families with two or more children currently qualify for an earned income tax credit equal to forty percent (40%) of the family’s first $12,570 of earned income. This credit is subject to a phase-out for working families with adjusted gross income in excess of $16,420 ($19,540 for married couples filing jointly). The bill would increase the earned income tax credit to forty-five percent (45%) of the family’s first $12,570 of earned income for families with three or more children and would increase the beginning point of the phase-out range for all married couples filing a joint return (regardless of the number of children) by $1,880. This proposal is estimated to cost $4.663 billion over 10 years.
Increase eligibility for the refundable portion of child credit. The bill would increase the eligibility for the refundable child tax credit in 2009 and 2010. For 2008, the child tax credit is refundable to the extent of 15 percent of the taxpayer’s earned income in excess of $8,500. The bill would reduce this floor for 2009 and 2010 to $3,000. This proposal is estimated to cost $14.830 billion over 10 years.
 By expanding the child tax credit, the plan would provide a new tax cut for more approximately 6 million children, and increase the existing credit for approximately 10 million children.
“American Opportunity” education tax credit. The bill would provide financial assistance for individuals seeking a college education. For 2009 and 2010, the bill would provide taxpayers with a new “American Opportunity” tax credit of up to $2,500 of the cost of tuition and related expenses paid during the taxable year. Under this new tax credit, taxpayers will receive a tax credit based on one hundred percent (100%) of the first $2,000 of tuition and related expenses (including books) paid during the taxable year and twenty-five percent (25%) of the next $2,000 of tuition and related expenses paid during the taxable year. Forty percent (40%) of the credit would be refundable. This tax credit will be subject to a phase-out for taxpayers with adjusted gross income in excess of $80,000 ($160,000 for married couples filing jointly). This proposal is estimated to cost $13.907 billion over 10 years.
 Benefits for Pennsylvania: $2,500 for 138,000 additional families in Pennsylvania that will qualify for the new American Opportunity Tax Credit that makes college more affordable for 3.8 million families nationwide.

Helps more than 4 million additional students attend college with a new, $2,500 tax credit for families, which is partially refundable.  As a result, the nearly one-fifth of high school seniors who currently would receive no tax credit will receive a tax cut to make college affordable for the first time.
Refundable first-time home buyer credit. Last year, Congress provided taxpayers with a refundable tax credit that was equivalent to an interest-free loan equal to 10 percent of the purchase of a home (up to $7,500) by first-time home buyers. The provision applies to homes purchased on or after April 9, 2008 and before July 1, 2009. Taxpayers receiving this tax credit are currently required to repay any amount received under this provision back to the government over 15 years in equal installments, or, if earlier, when the home is sold. The credit phases out for taxpayers with adjusted gross income in excess of $75,000 ($150,000 in the case of a joint return). The bill eliminates the repayment obligation for taxpayers that purchase homes after January 1, 2009, increases the maximum value of the credit to $8,000, and removes the prohibition on financing by mortgage revenue bonds, and extends the availability of the credit for homes purchased before December 1, 2009. The provision would retain the credit recapture if the house is sold within three years of purchase. This proposal is estimated to cost $6.638 billion over 10 years.
DTV Conversion Coupons: $650 million to continue the coupon program to enable American households to convert from analog television transmission to digital transmission.

Refundable credit for certain Federal and State pensioners. The bill would provide a one-time refundable tax credit of $250 in 2009 to certain government retirees who are not eligible for Social Security benefits. This one-time credit is a reduction to any allowable Making Work Pay credit. This proposal is estimated to cost $218 million over 10 years.

Extension of AMT relief for 2009. The bill would provide more than 26 million families with tax relief in 2009 by extending AMT relief for nonrefundable personal credits and increasing the AMT exemption amount to $70,950 for joint filers and $46,700 for individuals. This proposal is estimated to cost $69.759 billion over 10 years.

 The American Recovery and Reinvestment Act of 2009 would protect over 26 million working families across the nation from the Alternative Minimum Tax, representing thousands of dollars in additional income taxes.
 According to the Congressional Research Service, 972,000 Pennsylvanians would be protected from the Alternative Minimum Tax in 2009.

Sales tax deduction for vehicle purchases. The bill provides all taxpayers with a deduction for State and local sales and excise taxes paid on the purchase of new cars, light truck, recreational vehicles, and motorcycles through 2009. This deduction is subject to a phase-out for taxpayers with adjusted gross income in excess of $125,000 ($250,000 in the case of a joint return). This proposal is estimated to cost $1.684 billion over 10 years.
Temporary suspension of taxation of unemployment benefits. Under current law, all federal unemployment benefits are subject to taxation. The average unemployment benefit is approximately $300 per month. The proposal temporarily suspends federal income tax on the first $2,400 of unemployment benefits per recipient. Any unemployment benefits over $2,400 will be subject to federal income tax. This proposal is in effect for taxable year 2009. This proposal is estimated to cost $4.740 billion over 10 years.

Treasury Department low-income housing grants in lieu of tax credits: Under current law, taxpayers are allowed to claim a low-income housing tax credit for certain investments made in low-income housing. These tax credits help attract private capital to invest in the construction, acquisition, or rehabilitation of qualified low-income housing buildings. Current economic conditions have severely undermined the effectiveness of these tax credits. As a result, the bill would allow taxpayers to receive a grant from the Treasury Department in lieu of tax credits. Under this provision, States housing agencies would receive a grant equal to up to eighty-five percent (85%) of forty percent (40%) of the state’s low-income housing tax credit allocation in lieu of the low-income housing tax credits they would have received. The subawards are subject to the same requirements (including rent, income, and use restrictions on such buildings) as the low-income housing tax credit allocations. The grant program would apply to each state’s 2009 low-income housing tax credit allocation. This provision is estimated to cost $69 million over 10 years.

b. Small Business Tax Incentives and Support to Create Jobs and Spur Investment

The economic recovery legislation will infuse the nation’s small businesses- which comprise 99 percent of American industry and employ half of the private sector workforce with billions in new lending and investment.  The provisions in the bill putting fresh capital in the hands of small business owners, which will result in the creation or retention of 400,000 jobs, more than 15 percent of the jobs the economy shed last year; and also targets billions of dollars in tax relief to small businesses, which will also helps spur growth. These provisions are designed to help entrepreneurs not only survive the recession, but to create jobs and put us back on a path of economic growth.

In recent months, smaller firms have struggled with plunging consumer demand, while also finding that needed credit has been shut off in frozen financial markets. The small business provisions in the legislation are designed to help address these problems with new authorities for the Small Business Administration and targeted tax relief for small businesses.  Specifically, the bill will:

Extension of bonus depreciation. Businesses are allowed to recover the cost of capital expenditures over time according to a depreciation schedule. Last year, Congress temporarily allowed businesses to recover the costs of capital expenditures made in 2008 faster than the ordinary depreciation schedule would allow by permitting these businesses to immediately write-off fifty percent of the cost of depreciable property (e.g., equipment, tractors, wind turbines, solar panels, and computers) acquired in 2008 for use in the United States. The bill would extend this temporary benefit for capital expenditures incurred in 2009. TOTAL COST: $5.07 billion
Extension of enhanced small business expensing. In order to help small businesses quickly recover the cost of certain capital expenses, small business taxpayers may elect to write-off the cost of these expenses in the year of acquisition in lieu of recovering these costs over time through depreciation. Until the end of 2010, small business taxpayers are allowed to write-off up to $125,000 (indexed for inflation) of capital expenditures subject to a phase-out once capital expenditures exceed $500,000 (indexed for inflation). Last year, Congress temporarily increased the amount that small businesses could write-off for capital expenditures incurred in 2008 to $250,000 and increased the phase-out threshold for 2008 to $800,000. The bill would extend these temporary increases for capital expenditures incurred in 2009. TOTAL COST: $41 million
5-year carryback of net operating losses. Under current law, net operating losses may be carried back to the two years before the year that the loss arises (the “carryback period”) and carried forward to each of the succeeding twenty years after the year that the loss arises (the “carryforward period”). Losses that are carried back may generally only be used to offset ninety percent (90%) of a taxpayer’s alternative minimum tax liability. For 2008, the bill extends the carryback from two years to five years but limits it to small businesses with gross receipts of $15 million or less. TOTAL COST: $947 million
• By allowing businesses to improve cash flow by providing a 5-year carryback of net operating losses (NOLs), the bill would allow businesses to write off 90% of losses incurred in 2008 and 2009 against taxes assessed over the previous five years (current law limits NOL carryback to the previous two years).  This would not be available to companies that have benefited under the TARP.
Delayed Recognition of Certain Cancellation of Debt Income. Under current law, a taxpayer generally has income where the taxpayer cancels or repurchases its debt for an amount less than its adjusted issue price. The amount of cancellation of debt income (“CODI”) is the excess of the old debt’s adjusted issue price over the repurchase price. Certain businesses will be allowed to recognize CODI over 10 years (defer tax on CODI for the first four or five years and recognize this income ratably over the following five taxable years) for specified types of business debt repurchased by the business after December 31, 2008 and before January 1, 2011. TOTAL COST: $1.622 billion
Incentives to hire unemployed veterans and disconnected youth. Under current law, businesses are allowed to claim a work opportunity tax credit equal to 40 percent of the first $6,000 of wages paid to employees of one of nine targeted groups. The bill would create two new targeted groups of prospective employees: (1) unemployed veterans; and (2) disconnected youth. An individual would qualify as an unemployed veteran if they were discharged or released from active duty from the Armed Forces during 2008, 2009 or 2010 and received unemployment compensation for more than four weeks during the year before being hired. An individual qualifies as a disconnected youth if they are between the ages of 16 and 25 and have not been regularly employed or attended school in the past 6 months.
Repeal of Treasury Section 382 Notice. Last year, the Treasury Department issued Notice 2008-83, which liberalized rules in the tax code that are intended to prevent taxpayers that acquire companies from claiming losses that were incurred by the acquired company prior to the taxpayer’s ownership of the company. The bill would repeal this Notice prospectively. This Provision is expected to raise $6.977 billion
Extension of Monetization of Accumulated AMT and R&D Credits in Lieu of Bonus Depreciation: Extends the provision contained in the Foreclosure Prevent Act of 2008 and allows AMT and loss taxpayers in 2009 to receive 20 percent of the value of their old AMT or research and development (R&D) credits to the extent such taxpayers invest in assets that qualify for bonus depreciation. The amount is capped at the lesser of six percent of outstanding and unused AMT and R&D credits or $30 million. TOTAL COST: $805 million
Small Business Capital Gains: Allows an exclusion for individuals on the gain from the sale of certain small business stock held for more than five years.
This change is for stock issued after the date of enactment and before January 1, 2011. Allows a 75 percent exclusion for individuals on the gain from the sale of certain small business stock held for more than five years. TOTAL COST: $829 million

S Corp Holding Period: Under current law, if a taxable corporation converts into an S corporation, the conversion is not a taxable event. However, following such a conversion, an S corporation must hold its assets for ten years in order to avoid a tax on any built-in gains that existed at the time of the conversion. The bill would temporarily reduce this holding period from ten years to seven years for sales occurring in 2009 and 2010. Temporarily shortens the holding period of assets subject to the built-in gains tax from 10 years to seven years.                                      TOTAL COST: $415 million

Industrial Development Bonds: Modernizes certain tax exempt qualified small issue bonds or industrial development bonds (IDBs) for facilities that create or manufacture intangible property. The proposal also clarifies which physical components of any given facility are eligible for such tax exempt financing. TOTAL COST: $203 million

Increase in New Markets Tax Credit: Under current law, there are $3.5 billion of New Markets Tax Credits (NMTC) available for each of 2008 and 2009. Bill authorizes additional funding for the 2008 and 2009 allocation rounds. Tax credits for the 2009 allocation round would be allowed against the alternative minimum tax. TOTAL COST: $815 million.

Modification to the Rules for Tax-Exempt Interest Expense Relating to Financial Institutions: Changes the determination of the portion of interest expense that is allocable to investments in tax-exempt municipal bonds.  In addition, the proposal increases the small issuer exception. Changes the determination portion by excluding investments in tax-exempt municipal bonds issued during 2009 and 2010 to the extent that these investments constitute less than two percent (2 percent) of the average adjusted bases of all the assets of the financial institution. In addition, the proposal increases the small issuer exception to $30 million and applies the $30 million calculation at the ultimate borrower level if the ultimate borrower would separately qualify for the exception. TOTAL COST: $3.2 billion

Build America Bonds: The proposal provides State and local governments with a new tax credit bond option for infrastructure projects. Allows the State or local government to elect to receive a direct payment from the Federal government equal to the subsidy that would have otherwise been delivered through the Federal tax credit. TOTAL COST: $4.34 billion

Temporary small business estimated tax payment relief: The bill reduces the 2009 required estimated tax payments for certain small businesses. This provision has been estimated to have no revenue effect over 10 years.

c. Tax Incentives for Renewable Energy and Energy Efficiency to Spur Energy Savings and Create Green Jobs ($20 billion over 10 years)

Treasury Department energy grants in lieu of tax credits. Under current law, taxpayers are allowed to claim a production tax credit for electricity produced by certain renewable energy facilities and an investment tax credit for certain renewable energy property. These tax credits help attract private capital to invest in renewable energy projects. Current economic conditions have severely undermined the effectiveness of these tax credits. As a result, the bill would allow taxpayers to receive a grant from the Treasury Department in lieu of tax credits. This grant will operate like the current-law investment tax credit. The Treasury Department will issue a grant in an amount equal to thirty percent (30%) of the cost of the renewable energy facility within sixty days of the facility being placed in service or, if later, within sixty days of receiving an application for such grant. This proposal is estimated to cost $5 million over 10 years.
Long-term extension and modification of renewable energy production tax credit. The bill would extend the placed-in-service date for wind facilities for three years (through December 31, 2012). The bill would also extend the placed-in-service date for three years (through December 31, 2013) for certain other qualifying facilities: closed-loop biomass; open-loop biomass; geothermal; small irrigation; hydropower; landfill gas; waste-to-energy; and marine renewable facilities. This proposal is estimated to cost $13.143 billion over 10 years.
Temporary election to claim the investment tax credit in lieu of the production tax credit. Under current law, facilities that produce electricity from solar facilities are eligible to take a thirty percent (30%) investment tax credit in the year that the facility is placed in service. Facilities that produce electricity from wind, closed-loop biomass, open-loop biomass, geothermal, small irrigation, hydropower, landfill gas, waste-to-energy, and marine renewable facilities are eligible for a production tax credit. The production tax credit is payable over a ten-year period. Because of current market conditions, it is difficult for many renewable projects to find financing due to the uncertain future tax positions of potential investors in these projects. The bill would allow facilities to elect to claim the investment tax credit in lieu of the production tax credit. This proposal is estimated to cost $285 million over 10 years.
Repeal subsidized energy financing limitation on the investment tax credit. Under current law, the investment tax credit must be reduced if the property qualifying for the investment tax credit is also financed with industrial development bonds or through any other Federal, State, or local subsidized financing program. The bill would repeal this subsidized energy financing limitation on the investment tax credit in order to allow businesses and individuals to qualify for the full amount of the investment tax credit even if such property is financed with industrial development bonds or through any other subsidized energy financing. The cost of this proposal is included in the estimated cost of the next provision.
Removal of dollar limitations on certain energy credits. Under current law, businesses are allowed to claim a thirty percent (30%) tax credit for qualified small wind energy property (capped at $4,000). Individuals are allowed to claim a thirty percent (30%) tax credit for qualified solar water heating property (capped at $2,000), qualified small wind energy property (capped at $500 per kilowatt of capacity, up to $4,000), and qualified geothermal heat pumps (capped at $2,000). The bill would repeal the individual dollar caps. As a result, each of these properties would be eligible for an uncapped thirty percent (30%) credit. This proposal is estimated to cost $872 million over 10 years.
Clean renewable energy bonds (“CREBs”). The bill authorizes an additional $1.6 billion of new clean renewable energy bonds to finance facilities that generate electricity from the following resources: wind; closed-loop biomass; open-loop biomass; geothermal; small irrigation; hydropower; landfill gas; marine renewable; and trash combustion facilities. This $1.6 billion authorization will be subdivided into thirds: 1/3 will be available for qualifying projects of State/local/tribal governments; 1/3 for qualifying projects of public power providers; and 1/3 for qualifying projects of electric cooperatives. This proposal is estimated to cost $578 million over 10 years.
Qualified energy conservation bonds. The bill authorizes an addition $2.4 billion of qualified energy conservation bonds to finance State, municipal and tribal government programs and initiatives designed to reduce greenhouse gas emissions. The bill would also clarify that qualified energy conservation bonds may be issued to make loans and grants for capital expenditures to implement green community programs. The bill also clarifies that qualified energy conservation bonds may be used for programs in which utilities provide ratepayers with energy-efficient property and recoup the costs of that property over an extended period of time. This proposal is estimated to cost $803 million over 10 years.

Tax credits for energy-efficient improvements to existing homes. The bill would extend the tax credits for improvements to energy-efficient existing homes through 2010. Under current law, individuals are allowed a tax credit equal to ten percent (10%) of the amount paid or incurred by the taxpayer for qualified energy efficiency improvements installed during the taxable year. This tax credit is capped at $50 for any advanced main air circulating fan, $150 for any qualified natural gas, propane, oil furnace or hot water boiler, and $300 for any item of energy-efficient building property. For 2009 and 2010, the bill would increase the amount of the tax credit to thirty percent (30%) of the amount paid or incurred by the taxpayer for qualified energy efficiency improvements during the taxable year. The bill would also eliminate the property-by-property dollar caps on this tax credit and provide an aggregate $1,500 cap on all property qualifying for the credit. The bill would update the energy-efficiency standards of the property qualifying for the credit. This proposal is estimated to cost $2.034 billion over 10 years.
Tax credits for alternative refueling property. The alternative refueling property credit provides a tax credit to businesses (e.g., gas stations) that install alternative fuel pumps, such as fuel pumps that dispense E85 fuel, electricity, hydrogen, and natural gas. For 2009 and 2010, the bill would increase the 30% alternative refueling property credit for businesses (capped at $30,000) to 50% (capped at $50,000). Hydrogen refueling pumps would remain at a 30% credit percentage; however, the cap for hydrogen refueling pumps will be increased to $200,000. In addition, the bill would increase the 30% alternative refueling property credit for individuals (capped at $1,000) to 50% (capped at $2,000). This proposal is estimated to cost $54 million over 10 years.

Plug-in electric drive vehicle credit. The bill modifies and increases a tax credit passed into law at the end of last Congress for each qualified plug-in electric drive vehicle placed in service during the taxable year. The base amount of the credit is $2,500. If the qualified vehicle draws propulsion from a battery with at least 5 kilowatt hours of capacity, the credit is increased by $417, plus another $417 for each kilowatt hour of battery capacity in excess of 5 kilowatt hours up to 16 kilowatt hours. Taxpayers may claim the full amount of the allowable credit up to the end of the first calendar quarter in which the manufacturer records its 200,000th sale of a plug-in electric drive vehicle. The credit is reduced in following calendar quarters. The credit is allowed against the alternative minimum tax (AMT). The bill also restores and updates the electric vehicle credit for plug-in electric vehicles that would not otherwise qualify for the larger plug-in electric drive vehicle credit and provides a tax credit for plug-in electric drive conversion kits. This proposal is estimated to cost $2.002 billion over 10 years.
Addition of permanent sequestration requirement to CO2 capture tax credit. Last year, Congress provided a $10 credit per ton for the first 75 million metric tons of carbon dioxide captured and transported from an industrial source for use in enhanced oil recovery, and $20 credit per ton for carbon dioxide captured and transported from an industrial source for permanent storage in a geologic formation. Facilities were required to capture at least 500,000 metric tons of carbon dioxide per year to qualify. The bill would require that any taxpayer claiming the $10 credit per ton for carbon dioxide captured and transported for use in enhanced oil recovery must also ensure that such carbon dioxide is permanently stored in a geologic formation. This proposal is estimated to have a negligible revenue effect.
Parity for transit benefits. Current law provides a tax-free fringe benefit employers can provide to employees for transit and parking. Those benefits are set at different dollar amounts. This provision would equalize the tax-free benefit employers can provide for transit and parking. The proposal sets both the parking and transit benefits at $230 a month for 2009, indexes them equally for 2010, and clarifies that certain transit benefits apply to federal employees. This provision is estimated to cost $192 million over ten years.

d. Tax Incentives for State and Local Governments

Eliminate costs imposed on State and local governments by the alternative minimum tax. The alternative minimum tax (AMT) can increase the costs of issuing tax-exempt private activity bonds imposed on State and local governments. Under current law, interest on tax-exempt private activity bonds is generally subject to the AMT. This limits the marketability of these bonds and, therefore, forces State and local governments to issue these bonds at higher interest rates. Last year, Congress excluded one category of private activity bonds (i.e., tax-exempt housing bonds) from the AMT. The bill would exclude the remaining categories of private activity bonds from the AMT if the bond is issued in 2009 or 2010. The bill would exclude the remaining categories of private activity bonds from the AMT if the bond is issued in 2009 or 2010. The bill also allows AMT relief for current refunding of private activity bonds issued after 2003 and refunded during 2009 and 2010. TOTAL COST: $555 million
Delay application of 3% withholding requirement on certain governmental payments for goods and services. For payments made after December 31, 2010, the Code requires withholding at a three percent rate on certain payments to persons providing property or services made by Federal, State, and local governments. The withholding is required regardless of whether the government entity making the payment is the recipient of the property or services (those with less than $100 million in annual expenditures for property or services are exempt). Numerous government entities and small businesses have raised concerns about the application of this provision. The provision would delay for one year (through December 31, 2011) the application of the three percent withholding requirement on government payments for goods and services in order to provide time for the Treasury Department to study the impact of this provision on government entities and other taxpayers. This provision is estimated to cost $291 million over 10 years.
Qualified school construction bonds. The bill creates a new category of tax credit bonds for the construction, rehabilitation, or repair of public school facilities or for the acquisition of land on which a public school facility will be constructed. There is a national limitation on the amount of qualified school construction bonds that may be issued by State and local governments of $22 billion ($11 billion allocated initially in 2009 and the remainder allocated in 2010). There is a national limitation on the amount of qualified school construction bonds that may be issued by Indian tribal governments of $400 million ($200 million allocated initially in 2009 and the remainder allocated in 2010). This proposal is estimated to cost $9.877 billion over 10 years.

Extension and increase in authorization for qualified zone academy bonds (QZABs). The bill would allow an additional $1.4 billion of QZAB issuing authority to State and local governments in 2009 and 2010, which can be used to finance renovations, equipment purchases, developing course material, and training teachers and personnel at a qualified zone academy. In general, a qualified zone academy is any public school (or academic program within a public school) below college level that is located in an empowerment zone or enterprise community and is designed to cooperate with businesses to enhance the academic curriculum and increase graduation and employment rates. QZABs are a form of tax credit bonds which offer the holder a Federal tax credit instead of interest. This proposal is estimated to cost $1.045 billion over 10 years.

Tax credit bond option for State and local governments (“Build America Bonds”). The Federal government provides significant financial support to State and local governments through the federal tax exemption for interest on municipal bonds. Both tax credit bonds and tax-exempt bonds provide a subsidy to municipalities by reducing the cash interest payments that a State or local government must make on its debt. Tax credit bonds differ from tax-exempt bonds in two principal ways: (1) interest paid on tax credit bonds is taxable; and (2) a portion of the interest paid on tax credit bonds takes the form of a Federal tax credit. The Federal tax credit offsets a portion of the cash interest payment that the State or local government would otherwise need to make on the borrowing. For 2009 and 2010, the bill would provide State and local governments with the option of issuing a tax credit bond instead of a tax-exempt governmental obligation bond. Because the market for tax credits is currently small given current economic conditions, the bill would allow the State or local government to elect to receive a direct payment from the Federal government equal to the subsidy that would have otherwise been delivered through the Federal tax credit for bonds. This proposal is estimated to cost $4.348 billion over 10 years.

De minimis safe harbor exception for tax-exempt interest expensing for financial institutions. Under current law, financial institutions are not allowed to take a deduction for the portion of their interest expense that is allocable to such institution’s investments in tax-exempt municipal bonds. In determining the portion of interest expense that is allocable to investments in tax-exempt municipal bonds, the bill would exclude investments in tax-exempt municipal bonds issued during 2009 and 2010 to the extent that these investments constitute less than two percent (2%) of the average adjusted bases of all the assets of the financial institution.
Modification of small issuer exception to tax-exempt interest expense allocation rules for financial institutions. As described above, financial institutions are institution’s investments in tax-exempt municipal bonds. For purposes of this interest disallowance rule, bonds that are issued by a “qualified small issuers” are not taken into account as investments in tax-exempt municipal bonds. Under current law, a “qualified small issuer” is defined as any issuer that reasonably anticipates that the amount of its tax-exempt obligations (other than certain private activity bonds) will not exceed $10,000,000. The bill would increase this dollar threshold to $30,000,000 when determining whether a tax-exempt obligation issued in 2009 and 2010 qualifies for this small issuer exception. The small issuer exception would also apply to an issue if all of the ultimate borrowers in such issue would separately qualify for the exception. For these purposes, the issuer of a qualified 501(c)(3) bond shall be deemed to be the ultimate borrower on whose behalf a bond was issued.
e. Tax Recovery for Recovery Zones

Recovery Zone Bonds. The bill would create a new category of tax credit bonds for investment in economic recovery zones. The bill would authorize $10 billion in recovery zone economic development bonds and $15 billion in recovery zone facility bonds. These bonds could be issued during 2009 and 2010. Each state would receive a share of the national allocation based on that state=s job losses in 2008 as a percentage of national job losses in 2008. That allocation would be sub-allocated to local municipalities. Municipalities receiving an allocation of these bonds would be permitted to use these bonds to invest in infrastructure, job training, education, and economic development in areas within the boundaries of the State, city or county (as the case may be) that has significant poverty, unemployment or home foreclosures.
Tribal Economic Development Bonds. Under current law, tribal governments are limited in their ability to issue tax-exempt bonds. Projects funded by bonds issued by tribal governments must satisfy an “essential governmental function” requirement. This requirement is not imposed on projects funded by bonds issued by State and local governments, and can limit the ability of tribal governments to use tax-exempt bonds for economic development. The bill would temporarily allow tribal governments to issue $2 billion in tax-exempt bonds for projects without this restriction in order to spur economic development on tribal lands, and would require the Secretary of the Treasury to study whether this restriction should be repealed on a permanent basis.

f.  Manufacturing Recovery Provisions
Industrial development bonds (IDB). Under current law, certain manufacturing facilities are eligible for tax exempt bond financing. Section 144(a)(12)(C) specifically limits the definition of a manufacturing facility for the purposes of such financing to facilities that are used in the manufacturing or production of tangible personal property. The proposal amends the definition of manufacturing facility to any facility used in the manufacturing, creation, or production of tangible or intangible property described in section 197(d)(1)(C)(iii). Intangible property is any patent, copyright, formula, process, design, pattern, knowhow, format, or other similar item. The proposal also clarifies which physical components of a manufacturing facility qualify as "ancillary" and therefore are subjected to a 25% limitation in the amount of bond issuance used to build or re-construct those components. This proposal is estimated to cost $203 million over ten years.

Advanced energy investment credit. The proposal establishes a new 30% investment tax credit for facilities engaged in the manufacture of advanced energy property. Credits are available only for projects certified by the Secretary of Treasury, in consultation with the Secretary of Energy, through a competitive bidding process. The Secretary of Treasury must establish a certification program no later than 180 days after date of enactment, and may allocate up to $2.3 billion in credits. Advanced energy property includes technology for the production of renewable energy, energy storage, energy conservation, efficient transmission and distribution of electricity, and carbon capture and sequestration. This proposal is estimated to cost $1.647 billion over 10 years.

II. SAVE PUBLIC SECTOR JOBS AND PROTECT VITAL SERVICES

a. Medicaid Aid to States (FMAP):
Approximately $86.6 billion to states, increasing through the end of FY 2010 the share of Medicaid costs the federal government reimburses states, with additional relief tied to rates of unemployment. In the previous recession the federal government increased its contribution to Medicaid to help states avoid cuts in health benefits at a time when low-income patient loads are increasing and State revenues are declining.

b. State Education and Other Budget Priorities:
- $53.6 billion for the State Fiscal Stabilization Fund, including $39.5 billion to local school districts using existing funding formulas, which can be used for preventing cutbacks, preventing layoffs, school modernization, or other purposes; $5 billion to states as bonus grants for meeting key performance measures in education; and $8.8 billion to states for high priority needs such as public safety and other critical services, which may include education and for modernization, renovation and repairs of public school facilities and institutions of higher education facilities.  
 Benefits for Pennsylvania: $1.6 billion through the State Fiscal Stabilization Fund to local school districts and public colleges and universities in addition to incentive grants as a reward for meeting key education performance measures and additional funding for other high priority needs such as public safety and other critical services, which may include education

- $13 billion for Title 1 to help close the achievement gap and enable disadvantaged students to reach their potential.
 Benefits for Pennsylvania: $523.8 million for Title I Education for the Disadvantaged to help close the achievement gap and enable disadvantaged students to reach their potential

- $12.2 billion for Special Education/IDEA to improve educational outcomes for disabled children. This level of funding will increase the Federal share of special education services to its highest level ever.
 Benefits for Pennsylvania: $426.6 million for Special Education Part B State Grants to help improve educational outcomes for individuals with disabilities, raising the federal contribution to nearly 40 percent, the level established when the law was authorized more than 30 years ago

- $15.6 billion to increase the maximum Pell Grant by $500.  This aid will help 7 million students pursue postsecondary education.
- $3.95 billion for job training including State formula grants for adult, dislocated  worker, and youth programs (including $1.2 billion to create up to one million summer jobs for youth).
- $19.9 billion for additional Supplemental Nutrition Assistance Program (SNAP), formerly Food Stamps, to increase the benefit by 13.6 percent. 
 Benefits for Pennsylvania: $2 million for Senior Meals Programs to help senior meals programs cope with steep increases in food and fuel costs. Many programs are reducing meal deliveries to seniors or closing meal sites
o $754.1 million in Supplemental Nutrition Assistance Program benefits (formerly Food Stamps)
o $3.4 million for National School Lunch Program Equipment Assistance
o $4 million through the Emergency Food Assistance Program
o $3.8 million for the Emergency Food and Shelter Program, which provides grants to nonprofit and faith-based organizations at the local level to supplement their programs for emergency food and shelter to provide for the immediate needs of the homeless

- Child Care Development Block Grant: $2 billion to provide quality child care services for an additional 300,000 children in low-income families who increasingly are unable to afford the high cost of day care. 
 Benefits for Pennsylvania: $60.1 million in Child Care and Development Block Grants to provide quality child care services for in low-income families who increasingly are unable to afford the high cost of day care

- Head Start & Early Head Start:  $2.1 billion to allow an additional 124,000 children to participate in this program, which provides development, educational, health, nutritional, social and other activities that prepare children to succeed in school. 
 Benefits for Pennsylvania: $22.9 million for Head Start to allow additional children to participate in this program, which provides development, educational, health, nutritional, social and other activities that prepare children to succeed in school

- $555 million to expand the Department of Defense Homeowners Assistance Program (HAP) during the national mortgage crisis.

c. State and Local Law Enforcement:
$4 billion to support state and local law enforcement including $3 billion for the Byrne Justice Assistance (JAG) formula grants to support local law enforcement efforts with equipment and operating costs, and $1 billion for the COPS hiring grant program, to hire about 13,000 new police officers for three years. The grantee is responsible for at least 25% in matching funds and must commit to use their own funds to keep the officer on board in the fourth year.
 
 Byrne Justice Assistance Grant (JAG) Funding: Benefits for Pennsylvania
• $73.2 million in Byrne/JAG grants to support law enforcement efforts
• Also, $1 million in Internet Crimes Against Children Grants to help law enforcement agencies enhance their investigative response to offenders who use the Internet, online communication systems, or other computer technology to sexually exploit children
• $6.4 million in Violence Against Women Grants for victim services programs to improve the criminal justice system’s response to violent crimes against women and to assist victims of domestic violence, dating violence, sexual assault and stalking who are in need of transitional housing, short-term housing assistance, and related support services

d. Periodic Census and Programs, Communications:
$1 billion for work necessary to ensure a successful 2010 census.

e. Temporary Federal Medical Assistance Percentage (FMAP)
Increase.  The bill increases FMAP funding for a 27-month period beginning 10/1/2008 through 12/31/2010, with an across-the-board increase to all states of 6.2% and a similar increase for territories.  A bonus structure (in addition to the across-the-board increase) provides an additional decrease in State financial obligations for Medicaid based on increases in the State’s unemployment rate.  States will also be required to maintain effort on eligibility.  The estimated cost of these provisions is $86.6 billion.

f. Temporary Increase in Disproportionate Share Hospital (DSH)
Payments.  The bill increases states’ FY2009 annual DSH allotments by 2.5 percent, and increases states’ FY 2010 by 2.5 percent above the new FY2009 DSH allotment.  After FY2010, states’ annual DSH allotments would return to 100% of the annual DSH allotments as determined under current law.  The estimated cost of this provision is $460 million.

g. Extension of Moratoria on Medicaid Regulations.  The bill extends moratoria on Medicaid regulations for targeted case management, provider taxes, and school-based administration and transportation services through June 30, 2009.  The bill also adds a moratorium on the Medicaid regulation for hospital outpatient services through June 30, 2009.  The provision includes a Sense of Congress that the Secretary of HHS should not promulgate regulations concerning payments to public providers, graduate medical education, and rehabilitative services.  These provisions are estimated to cost $105 million.

h. Extension of Transitional Medical Assistance (TMA). The bill extends TMA beyond the current expiration date of June 30, 2009, to December 31, 2010.  This provision is estimated to cost $1.3 billion. 

i. Extension of the Qualified Individual Program.  The bill extends the Qualified Individual program, which assists certain low-income individuals with Medicare Part B premiums, through December 31, 2010.  The estimated cost of this provision is $550 million.

j. Protections for American Indian Health Care.  The bill eliminates cost-sharing for Americans Indians and Alaska Natives in Medicaid, protects Indian Tribal property, and maintains access to Indian health facilities.  These provisions are estimated to cost $134 million. 

j. Prompt Payment Requirements for Nursing Facilities and Hospitals.  The bill temporarily applies Medicaid prompt pay requirements to nursing facilities and hospitals.  This provision is estimated to cost $680 million.

III. Helping Workers Hurt by the Recession

In this economic crisis, high unemployment and rising costs have put a huge strain on many American families.  The American Recovery and Reinvestment Act contains a series of provisions to help, including helping workers train and find jobs, extending unemployment benefits, and increasing food stamp benefits.  Not only will these steps provide relief to American families, they will help jumpstart our economy as these funds are spent quickly and have the most “bang for the buck” in creating jobs and spurring economic growth.

“Increased income support has been part of the federal response to most recessions, and for good reason.  It is the most efficient way to prime the economy’s pump.  … Every dollar spent on UI benefits generates an estimated $1.63 in near-term GDP.  Boosting food stamp payments by $1 increases GDP by $1.73.  People who receive these benefits are hard-pressed and will spend any financial aid they receive very quickly.”  (Chief Economist Mark Zandi of Moodys.com, 1/21/09)

Unemployment Insurance Provisions: Benefits for Pennsylvania
 Unemployment in Pennsylvania stood at 6.7 percent in December 2008 (the last month for which we have data). The Department of Labor estimates that Pennsylvania could receive $275 million in new funding if Pennsylvania fully enacts the UI modernization incentives that the legislation would provide.
 According to the National Employment Law Project, this means that an additional $100 in unemployment insurance benefits will be offered to approximately 1.1 million Pennsylvania workers who have lost their jobs in this recession.

Details:

a. Helping Workers Find Jobs
• Helping Workers Find Jobs
Provides funding to help workers find jobs, including $3.95 billion for job training including formula grants for adult job training, dislocated worker job training, and youth services (including $1.2 billion to create up to one million summer jobs for youth); $500 million for Vocational Rehabilitation State Grants to help persons with disabilities prepare for gainful employment; $500 million to match unemployed individuals to job openings through state employment agencies; and $120 million to provide community service jobs to an additional 24,000 low-income older Americans.
• Expanding Housing Assistance
Increases support for several critical housing programs, including providing $2 billion for the Neighborhood Stabilization Program to help communities purchase and rehabilitate foreclosed, vacant properties and $1.5 billion for the Emergency Shelter Grant program to provide short-term rental assistance and other aid for families during the economic crisis.
• Providing Aid to Seniors, Disabled Veterans, and SSI Recipients
Provides a payment of $250 to retirees, disabled individuals and SSI recipients receiving benefits from the Social Security Administration, Railroad Retirement beneficiaries, and disabled veterans receiving benefits from the Department of Veterans Affairs. 
• Extending TAA
Extends Trade Adjustment Assistance benefits for at least 160,000 new workers over the next two years who lose their jobs because of increased imports or factory shifts to any foreign countries.

 Benefits for Pennsylvania:
o $15.4 million in State Employment Service Grants to match unemployed individuals to job openings through state employment service agencies and allow Pennsylvania to provide customized reemployment services
o $34.4 million in Dislocated Workers State Grants, particularly for grants that support immediate strategies for regions and communities to meet their need for skilled workers, as well as longer-term plans to build targeted industry clusters with better training and a more productive workforce
o $20.9 million for Vocational Rehabilitation to help individuals with disabilities prepare for and sustain gainful employment

b. Unemployment Insurance Benefits
Every dollar in unemployment benefits creates at least $1.63 in economic activity, according to chief economist Mark Zandi of Moodys.com.

• Extending and Improving Unemployment Benefits
o Continues through December 2009 the extended unemployment benefits program (which provides up to 33 weeks of extended benefits) that is otherwise scheduled to begin to phase out at the end of March 2009 – thereby helping an additional 3.5 million jobless workers.
o Increases unemployment benefits for 20 million jobless workers by $25 per week, and encourages states to modernize their UI systems to keep up with the changing workforce with expanded coverage.
o Temporarily suspends the taxation of some unemployment benefits.
o Every dollar in unemployment benefits creates at least $1.63 in economic activity, according to chief economist Mark Zandi of Moody’s Economy.com.

c. Increasing Food Stamp Benefits and Other Food Assistance
Every dollar in food stamps creates at least $1.73 in economic activity, according to chief economist Mark Zandi of the Moodys.com.
• Increasing Food Stamp Benefits
o Provides $19.9 billion for food stamps, increasing food stamp benefits by over 13% to help offset rising food costs for more than 31 million Americans, half of whom are children.
o Every dollar of food stamps creates at least $1.73 in economic activity, according to chief economist Mark Zandi of Moody’s Economy.com.
• Increasing Other Food Assistance
o Provides other food assistance, including $100 million for Emergency Food and Shelter to help local community organizations provide food and shelter; $100 million for formula grants to states for elderly nutrition services including Meals on Wheels; and $150 million for the Emergency Food Assistance Program to purchase commodities for food banks to refill emptying shelves.

 Benefits for Pennsylvania: $2 million for Senior Meals Programs to help senior meals programs cope with steep increases in food and fuel costs. Many programs are reducing meal deliveries to seniors or closing meal sites
o $754.1 million in Supplemental Nutrition Assistance Program benefits (formerly Food Stamps)
o $3.4 million for National School Lunch Program Equipment Assistance
o $4 million through the Emergency Food Assistance Program
o $3.8 million for the Emergency Food and Shelter Program, which provides grants to nonprofit and faith-based organizations at the local level to supplement their programs for emergency food and shelter to provide for the immediate needs of the homeless

d. COBRA Healthcare for the Unemployed:
Premium Subsidies for COBRA Continuation Coverage for Unemployed Workers: Recession-related job loss threatens health coverage for many families.  To help people maintain coverage, the bill provides a 65% subsidy for COBRA continuation premiums for up to 9 months for workers who have been involuntarily terminated, and for their families. This subsidy also applies to health care continuation coverage if required by states for small employers.  With COBRA premiums averaging more than $1000 a month, this assistance is vitally important.  To qualify for premium assistance, a worker must be involuntarily terminated between September 1, 2008 and December 31, 2009.  The subsidy would terminate upon offer of any new employer-sponsored health care coverage or Medicare eligibility.  Workers who were involuntarily terminated between September 1, 2008 and enactment, but failed to initially elect COBRA because it was unaffordable, would be given an additional 60 days to elect COBRA and receive the subsidy.  To ensure that this assistance is targeted at workers who are most in need, participants must attest that their same year income will not exceed $125,000 for individuals and $250,000 for families.  The Joint Committee on Taxation estimates that this provision would help 7 million people maintain their health insurance by providing a vital bridge for workers who have been forced out of their jobs in this recession.  This provision is estimated to cost $24.7 billion.

e. Protecting Health Care Coverage for Millions through Medicaid
Protects health care coverage for millions of Americans during this recession, by providing an estimated $87 billion over the next two years in additional federal matching funds to help states maintain their Medicaid programs in the face of massive state budget shortfalls.

f. Attacking the Housing Crisis
Increases support for several critical housing programs, including providing $2 billion for the Neighborhood Stabilization Program to help communities purchase and rehabilitate foreclosed, vacant properties and $1.5 billion for the Emergency Shelter Grant program to provide short-term rental assistance and other aid for families during the economic crisis.

• Public Housing Capital Fund: Funding for building repair and modernization, including critical safety repairs. Every dollar of Capital Fund expenditures produces $2.12 in economic return. Total Cost $4 billion
• HOME Investment Partnerships: enable state and local government, in partnership with community-based organizations, to acquire, construct, and rehabilitate affordable housing and provide rental assistance to poor families. Total Cost: $2.25 Billion.
• Native American Housing Block Grants: Funding to rehabilitate and improve energy efficiency at some of the over 42,000 housing units maintained by Native American housing programs. Total Cost: $500 million.
• Neighborhood Stabilization: Funding to help communities purchase and rehabilitate foreclosed, vacant properties in order to create more affordable housing and reduce neighborhood blight. Total Cost: $2 billion.
• Homeless Assistance Grants: Funding for the Emergency Shelter Grant program to provide short term rental assistance, housing relocation, and stabilization services for families during the economic crisis. Funds are distributed by formula. Total Cost: $1.5 billion,
• Rural Housing Insurance Fund: Funding to support billions in direct loans and loan guarantees to help rural families and individuals buy homes during the credit crunch. Last year these programs received a record number of applications. Total Cost: $200 million.
• Self-Help and Assisted Homeownership Program: Funding for rural, high-need areas to undertake projects using sustainable and energy-efficient building and rehabilitation practices. Funds will be awarded by competition to projects that can begin quickly.
• Lead Paint: Funding for competitive grants to local governments and nonprofit organizations to remove lead-based paint hazards in low-income housing. Total Cost: $100 million.
• Rural Community Facilities: Funding to support $1.2 billion in grants and loans to rural areas for critical community facilities, such as for healthcare, education, fire and rescue, day care, community centers, and libraries. There are over $1.2 billion in applications pending. Total Cost: $130 million.

Public Housing
• $4 billion to the public housing capital fund to enable local public housing agencies to address a $32 billion backlog in capital needs -- especially those improving energy efficiency in aging buildings.
• $2 billion for full-year payments to owners receiving Section 8 project-based rental assistance. 
• $2 billion for the redevelopment of abandoned and foreclosed homes. 
• $1.5 billion for homeless prevention activities, which will be sent out to states, cities and local governments through the emergency shelter grant formula.
• $250 million is included for energy retrofitting and green investments in HUD-assisted housing projects.

 Benefits for Pennsylvania:
o $213.2 million through the Public Housing Capital Fund to enable local public husing agencies to address a national $32 billion backlog in capital needs – especially those improving energy efficiency in aging developments – in this critical element of the nation’s affordable housing infrastructure
o $95 million in HOME Funding to enable state and local government, in partnership with community-based organizations, to acquire, construct, and rehabilitate affordable housing and provide rental assistance to poor families
o $90.4 million through the Homelessness Prevention Fund to be used for prevention activities, which include: short or medium-term rental assistance, first and last month’s rental payment, or utility payments. As such, most of this funding will go directly into the economy of local communities, as the funds will be used to pay housing and other associated costs in the private market

g. Payments to Disabled and Elderly: Increasing Social Security Insurance (SSI) Payments
• The bill would provide a one-time payment of $250 to retirees, disabled individuals and SSI recipients receiving benefits from the Social Security Administration, Railroad Retirement beneficiaries, and disabled veterans receiving benefits from the U.S. Department of Veterans Affairs. The one-time payment is a reduction to any allowable Making Work Pay credit. TOTAL COST: $14.2 billion

 Benefits for Pennsylvania:
o $250 to Social Security beneficiaries, SSI recipients, and disabled veterans

h.  Additional Provisions:
• Community Development Block Grants: $1 billion for community and economic development projects including housing and services for those hit hard by tough economic times.
• Emergency Food and Shelter: $100 million to help local community organizations provide food, shelter, and support services to the nation’s hungry, homeless, and people in economic crisis including one-month utility payments to prevent service cut-off and one-month rent or mortgage assistance to prevent evictions or help people leave shelters. Funds are distributed by formula based on unemployment and poverty rates.
• AmeriCorps Programs: $160 million to put approximately 16,000 additional AmeriCorps members to work doing national service, meeting needs of vulnerable populations and communities during the recession.
• Department of Labor Worker Protection and Oversight: $80 million to ensure that worker protection laws are enforced as recovery infrastructure investments are carried out.

IV.  Creating Jobs by Modernizing Roads, Bridges, Transit and
Waterways

To build a 21st century economy, we must create jobs rebuilding our crumbling roads and bridges, modernizing public buildings, and putting people to work cleaning up our air, water and land. The American Recovery and Reinvestment Act will make large investments to repair and modernize thousands of miles of roadways in the U.S. and providing new mass transit options for millions of Americans.  These provisions in total would create about 1.5 million American jobs—almost half the jobs in the plan as a whole.  Unprecedented accountability and transparency measures are built in to the legislation to ensure that tax dollars are spent wisely.
 
“Increasing infrastructure spending will also greatly boost the economy… Most of the infrastructure money will be spent on hiring workers and on materials and equipment produced domestically.” (Chief Economist Mark Zandi of Moody’s Economy.com, 1/21/09, P.9)
 
“Increased infrastructure spending is … a particularly effective way to stimulate the economy…The boost to GDP from every dollar spent on public infrastructure is large—an estimated $1.59—and there is little doubt that the nation has underinvested in infrastructure for some time, to the increasing detriment of the nation's long-term growth prospects.” (Chief Economist Mark Zandi of Moody’s Economy.com, 1/21/09, P.11)

Infrastructure Investment Formula Funding: Benefits for Pennsylvania under Original House Passed Bill (Estimates Have Not Been Updated for Most Recently Passed Stimulus Bill)
• Highways and Bridges: $1,254,266,677
• Transit Projects:
o Urban: $222,749,874
o Rural: $22,692,988
o Total: $245,442,862 
Fixed Guideway Modernization: $134,193,083
Clean Water Projects: $229,937,103
• AASHTO (American Association of State Highway and Transportation Officials) Survey of Ready-to-Go Highway & Bridge Projects in PA:
o Number of Projects: 319
o Dollar Value: $1,030 million

Distribution of Highway Infrastructure Funds to Large Urbanized Areas with Populations Greater than 200,000 under House Bill:

• Philadelphia    $92,384,371
                 
South Eastern Pennsylvania Transit Authority (SEPTA) Infrastructure/Transit Projects that the Stimulus will Fund in Congressman Sestak’s 7th District

• Highway grade crossing improvement along the 101/102 line in Upper Darby.  “This project will greatly improve traffic flow.”
• Install the Audio Visual Public Address System including public address, emergency call boxes, and message signs along the Rt 101/102
• Rail replacement along the 101/102 line and other projects that will for fewer service disruptions for customers
• Fiber optic cable for power control & passenger information system along Rt. 101/102 lines
• Replace warning device on Route 101 at 10 crossings to lessen impact on traffic.
• Restroom renovation at 69th Street
• Renovate the Folcroft, Morton, and Clifton Aldan stations
• 40 hybrid buses
• Track bed stabilization on R3 line from Elwyn to Wawa
• Malvern Station improvements to include a new pedestrian underpass, new energy efficient lighting, intertrack fencing, and expansion and improvements to parking lot
• Overhall of the power substations at Lenni, Morton, and Clifton
• Construct a 90 space parking lot at the Elwyn Station
• Rehabilitate the Bridgeport Norristown Viaduct

Highlights of Legislation:

$48 billion for various agencies of the Transportation Department to build a 21st century economy, create jobs rebuilding our crumbling roads and bridges, modernizing public buildings, and putting people to work cleaning up our air, water and land.

a.       Modernizing Roads and Bridges
• Provides $27.5 billion for modernizing roads and bridges. This investment creates jobs in the short term while saving commuters time and money in the long term.
• Requires states to obligate at least half of the highway/bridge funding within 120 days.
• States have over 6,100 projects totaling over $64 billion that could be under contract within 180 days.

 Benefits for Pennsylvania:
o $1 billion in Highway Funding to be used on activities eligible under the Federal-aid Highway Program’s Surface Transportation Program and could also include rail and port infrastructure activities at the discretion of the states

b.       Improving Public Transit and Rail
• Provides $8.4 billion for investments in transit and $8 billion for investment in high-speed rail.  These investments will reduce traffic congestion and our dependence on foreign oil.
• Includes funds for new construction of commuter and light rail, modernizing existing transit systems, and purchasing buses and equipment to needed to increase public transportation and improve intermodal and transit facilities.
• States have 787 ready-to-go transit projects totaling about $16 billion.

 Benefits for Pennsylvania:
o $343.7 million in Transit Formula Funding for investments in mass transit

c.        Prioritizing Clean Water/Flood Control/Environmental Restoration
• Provides $19 billion for clean water, flood control, and environmental restoration investments, which will create more hundreds of thousands of jobs.
• Experts note that $16 billion in water projects could be quickly obligated.
     
d.       Modernizing Public Infrastructure, Including To Achieve Major Energy
Cost Savings
• Provides billions to modernize federal and other public infrastructure with investments that lead to long-term energy cost savings, including about $4.2 billion to make improvements in DOD facilities, including housing for our troops and about $4.5 billion to make federal office buildings more energy-efficient in order to achieve long-term savings for taxpayers.
Details:
i. $27.5 billion for highway and bridge construction projects. It is estimated that states have over 5,100 projects totaling over $64 billion that could be awarded within 180 days. These projects create jobs in the short term while saving commuters time and money in the long term. In 2006, the Department of Transportation estimated $8.5 billion was needed to maintain current systems and $61.4 billion was needed to improve highways and bridges.
This funding includes:
• $9.3 billion for mass transit, 22% less than the House bill.
• $3 billion for the Federal Aviation Administration to provide discretionary grants for projects at airports.
• $1.3 billion for grants to Amtrak for capital projects
• $300 million for discretionary grants to states to help fund capital costs associated with intercity rail services, with an emphasis on developing high-speed rail services.
ii. Electrical Grid Projects
• $11 billion for electrical grid projects. Of that total, $4.5 billion is for implementing "smart grid" technologies, which would sense, collect, and monitor data from a grid, provide real-time, two-way communication to help monitor or manage the grid, and provide real-time analysis and event prediction based on data that would be used to improve the reliability, quality, and performance of the electricity grid.

iii. Renewable Electric Power Loan Guarantees

• $6 billion for the Renewable Energy and Electric Power Transmission Loan Guarantee Program, $2 billion less than the House bill and $3.5 billion less than the Senate version. This program provides loan guarantees to private entities to fund alternative energy research. The funds would be used for biofuel projects that use technologies that are deemed commercially viable and produce transportation fuels that will reduce greenhouse gas emissions.

iv. Other Infrastructure Spending

• The agreement provides $4 billion for the Clean Water State Revolving Fund, which provides grants to states for wastewater treatment projects. It appropriates $2 billion for the Drinking Water State Revolving Fund, which provides grants to states for drinking water infrastructure projects.

 Benefits for Pennsylvania:
o $66.2 million through the Drinking Water State Revolving Fund to address the backlog of drinking water infrastructure needs

• The measure provides $4.6 billion for the Army Corps of Engineers to accelerate completion of ongoing water projects and beginning construction of new projects, with priority directed to projects that can be completed with one year.

• The measure also provides funds for renovations to federal facilities and equipment across several different departments, including military bases, hospitals, vehicle fleets, and other government structures. The funds would be used for weatherization and installation of more energy-efficient technologies.

v. Infrastructure Improvements
• $7.2 billion for Broadband to increase broadband access and usage in unserved and underserved areas of the Nation, which will better position the U.S. for economic growth, innovation, and job creation.

• $2.75 billion for the Department of Homeland Security to secure the homeland and promote economic activity, including $1 billion for airport baggage and checkpoint security, $430 million for construction of border points of entry, $210 million for construction of fire stations, $300 million for port, transit, and rail security, $280 million for border security technology and communication, and $240 million for the Coast Guard.

• $4.6 billion in funding for the Corps of Engineers.

• $1.2 billion for VA hospital and medical facility construction and improvements, long-term care facilities for veterans, and improvements at VA national cemeteries.

• $3.1 billion for repair, restoration and improvement of public facilities at on public and tribal lands.

• $4.2 billion for Facilities Sustainment, Restoration and Modernization to be used to invest in energy efficiency projects and to improve the repair and modernization of Department of Defense facilities to include Defense Health facilities.

• $2.33 billion for Department of Defense Facilities including quality of life and family-friendly military improvement projects such as family housing, hospitals, and child care centers.

• $2.25 billion through HOME and the Low Income Housing Tax Credit program to fill financing gaps caused by the credit freeze and get stalled housing development projects moving.

• $1 billion for the Community Development Block Grant program for community and economic development projects including housing and services for those hit hard by tough economic times.

• $1 billion for the Bureau of Reclamation to provide clean, reliable drinking water to rural areas and to ensure adequate water supply to western localities impacted by drought. 

vi. Environmental Clean-Up/Clean Water

This section creates approximately 375,000 jobs by modernizing our nation’s water systems to strengthen the safety and cleanliness of our water and to ensure that 3.4 million rural households have new or improved service; Experts note that $16 billion in water projects could be quickly obligated.  [National Governors’ Association and the Association of State and Interstate Water Pollution Control Administrators]; expands efforts at environmental restoration, flood protection, hydropower, and navigation infrastructure and providing clean, reliable drinking water to rural areas critical to the economy through the Army Corp of Engineers and the Bureau of Reclamation; strengthens environmental cleanup efforts for Superfund, cleanup of petroleum leaks from underground storage tanks, nuclear waste cleanup, and brownfields that have the added benefit of creating jobs.

• $18 billion for clean water, flood control, and environmental restoration
o Clean Water State Revolving Fund: EPA estimates a $388 billion funding gap. The Association of State and Interstate Water Pollution Control Administrators found that 26 states have $10 billion in approved water projects.
 Benefits for Pennsylvania:
o $157.6 million through the Clean Water State Revolving Fund to address the backlog of clean water infrastructure needs
o Drinking Water State Revolving Fund: The National Governors Association reported that there are $6 billion in ready-to-go projects, which could quickly be obligated.
o Rural Water and Waste Disposal: In 2008, there were $2.4 billion in requests for water and waste loans and $990 million for water and waste grants went unfunded.
o Corps of Engineers: The Corps has a construction backlog of $61 billion.
o Bureau of Reclamation: The Bureau has backlogs of more than $1 billion in rural water projects and water reuse and recycling projects.
o Watershed Infrastructure: Funds for the Natural Resources Conservation Service watershed improvement programs to design and build flood protection and water quality projects, repair aging dams, and purchase and restore conservation easements in river flood zones.
o International Boundary and Water Commission: Funds to repair flood control systems along the international segment of the Rio Grande damaged by hurricane Katrina and other serious storms.

• $6 billion is directed towards environmental cleanup of former weapon production and energy research sites. 

• $6 billion for local clean and drinking water infrastructure improvements.

• $1.2 billion for EPA’s nationwide environmental cleanup programs, including Superfund.

• $1.38 billion to support $3.8 billion in loans and grants for needed water and waste disposal facilities in rural areas.

V. Lowering Health Care Costs and Ensuring Broader Coverage

Affordable and quality health care is key to strong American economic growth.  The American Recovery and Reinvestment Act invests in bringing our health care system into the 21st century with information technology – that is proven to reduce costs, increase quality, and save lives.  The package also protects health coverage for millions of Americans who have lost their jobs in this recession by providing up to 12 months of subsidized COBRA health insurance continuation coverage and a temporary state option to cover jobless workers through Medicaid.  Modernizing our health care system will create hundreds of thousands of jobs.  Economist Mark Zandi estimates that, overall, this recovery package will save or create more than 250,000 jobs in the health care and education sectors.

Details:

a. Health Insurance Assistance

• Premium Subsidies for COBRA Continuation Coverage for Unemployed Workers.  Recession-related job loss threatens health coverage for many families.  To help people maintain coverage, the bill provides a 65% subsidy for COBRA continuation premiums for up to 9 months for workers who have been involuntarily terminated, and for their families. This subsidy also applies to health care continuation coverage if required by states for small employers.  With COBRA premiums averaging more than $1000 a month, this assistance is vitally important.  To qualify for premium assistance, a worker must be involuntarily terminated between September 1, 2008 and December 31, 2009.  The subsidy would terminate upon offer of any new employer-sponsored health care coverage or Medicare eligibility.  Workers who were involuntarily terminated between September 1, 2008 and enactment, but failed to initially elect COBRA because it was unaffordable, would be given an additional 60 days to elect COBRA and receive the subsidy.  To ensure that this assistance is targeted at workers who are most in need, participants must attest that their same year income will not exceed $125,000 for individuals and $250,000 for families.  The Joint Committee on Taxation estimates that this provision would help 7 million people maintain their health insurance by providing a vital bridge for workers who have been forced out of their jobs in this recession.  This provision is estimated to cost $24.7 billion.

• Medicare Payments for Teaching Hospitals.  The bill blocks a FY09 Medicare payment reduction to teaching hospitals related to capital payments for indirect medical education (IME).  This provision is estimated to cost $191 million.

• Medicare Payments to Hospice.  The bill blocks FY09 Medicare payment cut to Hospice providers related to a wage index payment add-on.  This provision is estimated to cost $134 million. 

• Medicare Payments to Long Term Care Hospitals.  The bill makes technical corrections to the Medicare, Medicaid, and SCHIP Extension Act of 2007 related to Medicare payments for long-term care hospitals.  The estimated cost of these provisions is $13 million.

b. State Fiscal Relief and Medicaid

• Temporary Federal Medical Assistance Percentage (FMAP) Increase.  The bill increases FMAP funding for a 27-month period beginning 10/1/2008 through 12/31/2010, with an across-the-board increase to all states of 6.2% and a similar increase for territories.  A bonus structure (in addition to the across-the-board increase) provides an additional decrease in State financial obligations for Medicaid based on increases in the State’s unemployment rate.  States will also be required to maintain effort on eligibility.  The estimated cost of these provisions is $86.6 billion.

• Temporary Increase in Disproportionate Share Hospital (DSH) Payments.  The bill increases states’ FY2009 annual DSH allotments by 2.5 percent, and increases states’ FY 2010 by 2.5 percent above the new FY2009 DSH allotment.  After FY2010, states’ annual DSH allotments would return to 100% of the annual DSH allotments as determined under current law.  The estimated cost of this provision is $460 million.

• Extension of Moratoria on Medicaid Regulations.  The bill extends moratoria on Medicaid regulations for targeted case management, provider taxes, and school-based administration and transportation services through June 30, 2009.  The bill also adds a moratorium on the Medicaid regulation for hospital outpatient services through June 30, 2009.  The provision includes a Sense of Congress that the Secretary of HHS should not promulgate regulations concerning payments to public providers, graduate medical education, and rehabilitative services.  These provisions are estimated to cost $105 million.

• Extension of Transitional Medical Assistance (TMA). The bill extends TMA beyond the current expiration date of June 30, 2009, to December 31, 2010.  This provision is estimated to cost $1.3 billion. 

• Extension of the Qualified Individual Program.  The bill extends the Qualified Individual program, which assists certain low-income individuals with Medicare Part B premiums, through December 31, 2010.  The estimated cost of this provision is $550 million.

• Protections for American Indian Health Care.  The bill eliminates cost-sharing for Americans Indians and Alaska Natives in Medicaid, protects Indian Tribal property, and maintains access to Indian health facilities.  These provisions are estimated to cost $134 million. 

• Prompt Payment Requirements for Nursing Facilities and Hospitals.  The bill temporarily applies Medicaid prompt pay requirements to nursing facilities and hospitals.  This provision is estimated to cost $680 million.

c. Prevention & Wellness Fund
• The measure provides $1 billion for the creation of a "prevention and wellness fund," to make investments in preventive health care. Of this total, $2.4 billion would be transferred to the Centers for Disease Control and Prevention. This appropriation is one third of what was provided for in the House-passed version, while the Senate proposed no such funding.
d. National Research Center Resources
• The measure appropriates $1.3 billion for National Research Center Resources. Of this total, $1 billion would be for renovation of facilities.
e. Transitional Medical Assistance
• The agreement extends the Transitional Medicaid Assistance program through Dec. 31, 2010. (This program is scheduled to expire on June 30, 2009.) The provision would cost $1.3 billion. The program allows families in transition from welfare to the workforce to extend their Medicaid coverage for up to four months. It is intended to ensure that poor families do not lose health care coverage as their incomes increase. The authorization for these programs is currently scheduled to expire at the end of this month.
f. Qualified Individual Program
• The measure extends the Qualified Individual (QI) program, which assists certain low-income individuals with Medicare Part B premiums, through Dec. 31, 2010. (The program would currently expire on Dec. 31, 2009.) The estimated cost of this provision is $550 million. The program helps Medicare beneficiaries who have a limited income but are not poor enough to qualify for Medicaid with financial assistance to help pay their Medicare premiums.
g. Community Health Centers Care Services
• The agreement appropriates $500 million for community health centers to provide care to uninsured and underserved rural and urban populations. In its report, the House Appropriations Committee notes that a 2008 study conducted by the George Washington University showed that a $250 million annual increase could support an additional 1.8 million people in the low-income communities where such health centers are located.
h. Community Health Centers Modernization
• The measure provides $1.5 billion for community health centers modernization. This appropriation would be allocated through competitive grants or supplements to existing community health centers awards.
i. Training for Primary Care Physicians & Nurses
• The agreement provides $500 million for training programs for primary care providers, including pediatricians, dentists, nurses, and professionals working in family medicine and internal medicine. According to the House Appropriations Committee, this provision would double annual funding for training primary care doctors and dentists, and nursing programs such as nurse scholarships, nurse faculty loans, and advanced nursing.
j. Child Care Development Block Grant
• The agreement provides $2 billion for the Child Care Development Block Grant, which distributes funds to states for child care services for low-income families. The House Appropriations Committee notes in its report that nearly 140,000 fewer children are currently receiving child care help than in 2002. The House committee contends that this additional funding would enable states to provide child care assistance for an additional 300,000 children in "low-income working families who have been hit hard by the economic crisis," and would generate paid employment for an estimated 125,000 caregivers.

k. Health Information Technology
• Promoting the adoption and use of health information technology.  This bill promotes the use of health information technology (health IT), such as electronic health records, by: requiring the government to take a leadership role to develop standards by 2010 that allow for the nationwide electronic exchange and use of health information to improve the quality and coordination of care; investing $19 billion in health information technology infrastructure and Medicare and Medicaid incentives to encourage doctors, hospitals, and other providers to use health IT to electronically exchange patients’ health information; and strengthening Federal privacy and security law to protect identifiable health information from misuse and abuse as the health care sector increases use of health IT.
If the bill is enacted, approximately 90% of doctors and 70% of hospitals would adopt and use certified electronic health records within the next decade, according to the Congressional Budget Office. In turn, that would save the government more than $12 billion and generate additional savings throughout the health sector through improvements in quality of care, care coordination, and reductions in medical errors and duplicative care.
VI. Investing in Education for the 21st Century

A well-trained, college-educated workforce is key to a strong American economy and middle class. The economic crisis, combined with rising tuition prices and declining state support for higher education, threatens to put college out of reach for many students – forcing them to take a semester off or even skip college. Allowing students to be priced out of a college education will only further weaken our workforce and our economy. Economists, the business community, scientists and others agree that making strategic investments in education is a smart move to grow our economy and regain our competitive edge in the 21st century global economy.

Economists tell us that strategic investments in education are one of the best ways to help America become stronger, and more productive and competitive.  This recovery package will make bold investments to provide children with a 21st century education, modernize our schools and colleges, and make college more affordable.  Making investments to modernize our schools will create tens of thousands of jobs.  Economist Mark Zandi estimates that, overall, this recovery package will save or create more than 250,000 jobs in the education and health care sectors.

Specifically for the 7th Congressional District:
 $1.6 billion through the State Fiscal Stabilization Fund to local school districts and public colleges and universities in addition to incentive grants as a reward for meeting key education performance measures and additional funding for other high priority needs such as public safety and other critical services, which may include education
 $426.6 million for Special Education Part B State Grants to help improve educational outcomes for individuals with disabilities, raising the federal contribution to nearly 40 percent, the level established when the law was authorized more than 30 years ago
 $25.4 million in education technology funds to purchase up-to-date computers and software and provide professional development to ensure the technology is used effectively in the classroom
 $523.8 million for Title I Education for the Disadvantaged to help close the achievement gap and enable disadvantaged students to reach their potential

Highlights:

Investments in Education and Training include:
• $53.6 billion for the State Fiscal Stabilization Fund, including $39.5 billion to local school districts using existing funding formulas, which can be used for preventing cutbacks, preventing layoffs, school modernization, or other purposes; $5 billion to states as bonus grants for meeting key performance measures in education; and $8.8 billion to states for high priority needs such as public safety and other critical services, which may include education and for modernization, renovation and repairs of public school facilities and institutions of higher education facilities.  

• $13 billion for Title 1 to help close the achievement gap and enable disadvantaged students to reach their potential.

• $12.2 billion for Special Education/IDEA to improve educational outcomes for disabled children. This level of funding will increase the Federal share of special education services to its highest level ever.

• $15.6 billion to increase the maximum Pell Grant by $500.  This aid will help 7 million students pursue postsecondary education. 

• $3.95 billion for job training including State formula grants for adult, dislocated worker, and youth programs (including $1.2 billion to create up to one million summer jobs for youth).

Details:

Education for the 21st Century:  Economists tell us that strategic investments in education are one of the best ways to help America become more productive and competitive.  This bill will make key investments to help states avoid teacher layoffs and other damaging education cuts in this recession, help make college more affordable, and make other key education investments.  

a.       Preventing Teacher Layoffs and Cuts in Education and Other Key Services by the States:
Budget deficits are already projected for 39 states for the upcoming FY 2010.  Initial estimates of these shortfalls total over $80 billion.  As the full extent of FY  months, 29 states have implemented cuts in education due to budget shortfalls – for example, Georgia has cut aid to school districts by $95 per pupil; the University of Florida has eliminated 430 faculty and staff positions; and the University of Kentucky is raising its tuition 9 percent; Unless the recovery package is enacted, school districts across the country will have to enact further cuts.  There are newspaper stories from across the country.  “As many as 2,300 teachers could face midyear layoffs because of the state budget crisis, Los Angeles Unified School District officials said.” (Los Angeles Times, 1/7/09)   “Local school officials are preparing for drastic budget cuts…Most Marion and Polk County school districts are considering shortening the school year, asking staff to take salary cuts, or eliminating programs.” (Statesman Journal – Oregon, 1/21/09); Slashing education services undermines future economic growth in a state.  This recovery package, by preventing these cutbacks, will enhance future economic growth. Therefore, the bill:

• Creates a $53.6 billion state stabilization fund to help prevent education-related layoffs and restore harmful cuts to education funding, including :

o $39.5 billion to local school districts using existing funding formulas, which can be used for preventing cutbacks, preventing layoffs, school modernization, or other purposes; 

o $5 billion to states as bonus grants for meeting key performance measures in education; and

o $8.8 billion to states for high priority needs such as public safety and other critical services, which may include education and for modernization, renovation, and repairs of public school facilities and institutions of higher education facilities.
  
• Estimated Allocation of State Fiscal Stabilization Fund: Benefits for Pennsylvania under Passed Measure
o $1.6 billion through the State Fiscal Stabilization Fund to local school districts and public colleges and universities in addition to incentive grants as a reward for meeting key education performance measures and additional funding for other high priority needs such as public safety and other critical services, which may include education

b.       Making College More Affordable

• Increases the higher education tax credit to a maximum of $2,500.  Also makes it available to nearly 4 million low-income students who had not had any access to the higher education tax credit in the past – by making it partially refundable.

• Increases the maximum Pell Grant by $500, for a maximum of $5,350 in 2009 and $5,550 in 2010.

• Adds $200 million to the vital College Work-Study program.

c.       Investing in Early Childhood Development

• Provides $1.1 billion for Early Head Start and $1 billion for Head Start, which provide comprehensive development services to low-income infants and preschool children – thereby providing services for 124,000 additional infants and children.
• Provides $2 billion for the Child Care Development Block Grant to provide child care services to an additional 300,000 children in low-income families while their parents go to work.

d.       Providing Other Key Education Investments

• Provides $13 billion for Title I grants to help disadvantaged kids reach high academic standards – ensuring that in this period of tight state and local budgets these vital services are maintained.

• Provides $12.2 billion for grants for IDEA (Special Education) to increase the federal share of these costs, and prevent these mandatory costs from forcing states to cut other areas of education.
VII. Transforming Our Economy with Science, Technology & Innovation
This economic recovery package invests in science and technology – both creating jobs in the short-term and building a foundation for strong economic growth in the long-term.  The recovery package includes a major investment in scientific research, including investments at the National Science Foundation and the National Institute of Standards and Technology.  Regarding new technologies, the package also includes funds for America’s IT network infrastructure (including broadband, health IT, and a smarter energy grid).  More than 100 high-tech CEOs and business leaders have endorsed these IT investments and stated that this investment alone will create more than 949,000 U.S. jobs, more than half of which will be in small businesses.  
a. Broadband to Give Every Community Access to the Global Economy
• Broadband Grants: $7.2 billion for broadband services in underserved areas to strengthen the economy and provide business and job opportunities in every section of America with benefits to e-commerce, education, and healthcare. For every dollar invested in broadband the economy sees a ten-fold return on that investment.
o The stimulative impact of this investment would be:  1) jobs to procure, produce, deliver, install, and maintain new infrastructure; and 2) jobs in sectors of the economy that rely on e-commerce, including the retail, high-tech, education, health care, and real estate sectors.

b. Energy Efficiency Programs
• The agreement provides $16.8 billion for energy efficiency programs administered by the Energy Department. The agreement's appropriation is $1.7 billion less than the amount included in the House-passed version, but $2.4 billion more than the amount included in the Senate-passed version. The agreement also provides $5.5 billion for General Service Administration projects to modify federal buildings with energy-efficient technologies.

c. Federal Building Modifications
• The measure appropriates $5.5 billion for federal building construction and repair projects, $2.2 billion less than the House-passed measure, but $700 million more than the Senate-passed version. Of that total, the agreement directs $4.5 billion for projects that achieve the highest levels of energy efficiency for the buildings, known as "high performance green buildings."
• These renovations would include installation of photovoltaic cells (solar panels) on rooftops, lighting systems with timers and occupancy sensors, and more energy-efficient mechanical systems. Such construction projects were authorized by the 2007 Energy Independence and Security Act (PL 110-140). The agreement also provides $4 million for the Office of Federal High-Performing Green Buildings to establish energy efficiency building standards, also known as "green building" standards.
d. Low-Income Housing Weatherization
• The agreement provides $5 billion for the Energy Department's Weatherization Assistance Program, which covers some of the costs of insulating low-income residences, $1 billion less than the House-passed version. The Senate-passed version contained no funding. Like both the House- and Senate-passed versions, the measure also raises the eligibility limit to 200% of the federal poverty line, from 150%. The measure also increases the maximum amount allowed per residence to $6,500, from $2,500.

e.       Energy Efficiency Block Grants
• The agreement appropriates $3.2 billion for the Energy Department's Energy Efficiency Block Grant Program. The program, which was authorized by the 2007 Energy Independence and Security Act (PL   110-140), provides grants to state, local, and tribal governments to fund public facility renovation projects that would install more energy efficient building technologies and materials, and energy efficient technology demonstration projects.

f.       State Energy Program
• The measure provides $3.1 billion for the Energy Department's State Energy Program, which provides grants to states to fund state government energy technology research and development programs. This total is $300 million less than the amount included in the House-passed version, but $2.6 billion more than in the Senate-passed version.
i. Benefits for Pennsylvania:
o $100.8 million through the State Energy Program

g.       Energy Research & Development
• The agreement provides $2.5 billion for Energy Department energy efficiency and renewable energy research, development, demonstration, and deployment projects. Of that amount, $800 million would be used for biomass energy technology development, and $400 million would be used for geothermal projects. Biomass technologies includes growing plants to be used to produce fuel (biofuels) and using biodegradable waste as fuel. Geothermal energy is derived from capturing heat produced naturally underground.

h.       Advanced Battery Technology
• The measure provides a total of $2 billion for domestic manufacturing facilities to develop more advanced vehicle batteries. The total amount is identical to the amount contained in the Senate version, but $1 billion more than the House bill. The agreement does not, however, include the $2 billion in loan guarantees included in the House-passed version.

i. Alternative Fuel Vehicles Pilot Grant Program
• The agreement includes $300 million for the Energy Department to distribute grants, through its Clean Cities Program, to state and local governments, metropolitan transportation authorities, air pollution control districts, and appropriate private entities to be used to purchase and demonstrate alternatively fueled vehicles that utilize fuel cell, electric, or hybrid drive system technologies. This amount is $100 million less than the amount included in the House-passed version and $50 million less than the Senate-passed version.

j.    Energy Efficient Appliance Rebate Program
• The measure appropriates $300 million for an Energy Department grant program that provides funding assistance for energy efficient consumer appliance rebate programs. This amount is identical to the amount included in the House-passed version; the Senate-passed version did not include any funding. Currently, 15 states have such programs, which provide rebates to consumers who purchase energy efficient "energy star" appliances to replace used, less efficient appliances, which must be relinquished upon purchasing the new appliances.

k.    Transportation Electrification
• The agreement provides $400 million for a transportation electrical system construction program, authorized by the 2007 Energy Independence and Security Act (PL 110-140), at transportation facilities, including seaports and truck stops. The projects would include construction of electrical systems that vessels and vehicles could use for power instead of running onboard generators. The House- and Senate-passed versions each included $200 million. The projects' goal is to reduce emissions by reducing the need for vehicles to run such generators, which are usually powered by diesel engines.

l.    Alternatively Fueled Vehicle Fleets
• The measure provides $300 million to replace vehicles in federal fleets with alternatively fueled or hybrid vehicles, the same amount included in the Senate version, but $300 million less than the House-passed version.

m.    Energy Production Programs
• The agreement appropriates $9.4 billion for programs directly related to energy production administered by the Energy Department's Office of Energy Efficiency and Renewable Energy.

n.      Renewable Electric Power Loan Guarantees
• The measure provides $6 billion for the Renewable Energy and Electric Power Transmission Loan Guarantee Program, which provides loan guarantees to private entities to fund alternative energy research. This amount is $2 billion less than the amount included in the House bill and $3.5 billion less than the Senate version. The research would be for biofuel projects that will use technologies that are deemed commercially viable and produce transportation fuels that will reduce greenhouse gas emissions.

o.      Carbon Sequestration
• The agreement appropriates $3.4 billion for research, development, and demonstration of carbon sequestration, also known as carbon capture, projects. This amount is $1 billion more than the House version, but $1.2 billion less than the Senate bill. Carbon sequestration technology is designed to capture and store underground carbon produced from the burning of fossil fuels, rather than allowing it to be emitted into the atmosphere.

p.      Energy Transmission Programs
• The agreement provides $11 billion for energy transmission projects, including $4.5 billion for "smart grid" and other electrical grid infrastructure technologies, $3.25 billion in borrowing authority for the Western Area Power Administration, and $2.35 billion in borrowing authority for the Bonneville Power Administration, the same amounts provided in both the House and Senate bills.

q. Smart Grid Technology
• The measure provides $4.5 billion for implementing "smart grid" technologies, which would sense, collect, and monitor data from a grid, would provide real-time, two-way communication to help monitor or manage the grid, and would provide real-time analysis and event prediction based on data that would be used to improve the reliability, quality, and performance of the electricity grid.
• The Smart Grid Investment Program provides funds for regional demonstration projects, designed to tailor transmission technologies for the specific needs of different geographical regions, and provides matching grants to states to implement smart grid demonstration projects.

r. Power Administration Borrowing Authority
• The agreement appropriates $3.25 billion in increased borrowing authority for the Western Area Power Administration, which transmits hydroelectric power in 15 western states. The funds would be used to fund electrical transmission projects.
• The measure provides $3.25 billion in increased borrowing authority for the Bonneville Power Administration, which transmits electricity in the Pacific Northwest, for renewable energy projects.

s. Science Programs
• The conference agreement appropriates $5.6 billion for various science programs, including economic, environmental, weather, and construction research and development programs, and habitat restoration construction projects. This amount is $500 million more than the amount included in the House version, and $2.7 billion more than provided in the Senate bill.

t. National Science Foundation
• The measure provides $3 billion for the National Science Foundation, the same amount included in the House bill, but $2.8 billion more than in the Senate version. Of the total provided, $2.5 billion is for research on social, economic, and environmental issues as authorized by the 2007 America COMPETES Act (PL 110-69), $400 million for construction of research facilities, and $100 million for education and human resources programs.

u. National Oceanic & Atmospheric Administration
• The agreement appropriates $836 million for the National Oceanic & Atmospheric Administration, $164 million less than the House-passed version and $192 million less than the Senate bill. Of that total, the measure provides $600 million for procurement, including $230 million for procuring sensory equipment for studying the weather.

v. National Aeronautics & Space Administration
• The measure provides $1 billion for the National Aeronautics and Space Administration (NASA), $400 million more than the House version, but $300 million less than the Senate bill. Of that total, $400 million would be set aside for climate change research, with at least $250 million of that to be used to conduct NASA's Earth science and climate research missions recommended by the National Academies' decadonal survey. Of the $1 billion total, $150 million would be for aeronautics research and development, and $400 million would be for aeronautics.
w. National Institute for Standards & Technology
• The agreement appropriates $780 million for the Commerce Department's National Institute for Standards and Technology, which works with the private sector in an effort to advance U.S. competitiveness in science and technology fields. This amount is $280 million more than the amount included in the House bill, and $305 million more than the Senate version. Of that total, $360 million would be for research and development facility construction grants, and $240 million for research grants.

x. Health Information Technology
• Provides $19 billion to accelerate adoption of Health Information Technology (HIT) systems by doctors and hospitals, in order to modernize the health care system, save billions of dollars, reduce medical errors, and improve quality.  Also provides significant financial incentives through the Medicare and Medicaid programs to encourage doctors and hospitals to adopt and use HIT.
• Promoting the adoption of Health Information Technology systems will create hundreds of thousands of jobs – many of them high-tech jobs.
• The nonpartisan CBO estimates that, as a result of this legislation, approximately 90 percent of doctors and 70 percent of hospitals will be using electronic medical records within the next 10 years.

VIII. Create Jobs with Clean, Efficient, American Energy

To put people back to work today and reduce our dependence on foreign oil tomorrow, we are seeking to double our renewable energy production and renovate public buildings to make them more energy efficient. The energy package will create more than 500,000 jobs, and accelerate deployment of smart grid technology, provide energy efficiency funds for the nation’s schools, offer support for the nation’s governors and mayors to tackle their energy challenges, and establish a new loan guarantee program to keep our transition to renewable energy on track during the economic crisis.  

Details:

a. Reliable, Efficient Electricity Grid: $11 billion for research and development, pilot projects, and federal matching funds for the Smart Grid Investment Program to modernize the electricity grid making it more efficient, secure, and reliable and build new power lines to transmit clean, renewable energy from sources throughout the nation.
b. Renewable Energy Loan Guarantees: $6 billion for loans for renewable energy power generation and transmission projects.
c. GSA Federal Buildings: $5.5 billion for renovations and repairs to federal buildings including at least focused on increasing energy efficiency and conservation. Projects are selected based on GSA’s ready-to-go priority list.
d. Local Government Energy Efficiency Block Grants: $3.2 billion to help state and local governments make investments that make them more energy efficient and reduce carbon emissions.
e. Energy Efficiency Housing Retrofits: $2 billion for a new program to upgrade HUD sponsored low-income housing to increase energy efficiency, including new insulation, windows, and furnaces. Funds will be competitively awarded.
f. Energy Efficiency and Renewable Energy Research: $2.5 billion for energy efficiency and renewable energy research, development, demonstration, and deployment activities to foster energy independence, reduce carbon emissions, and cut utility bills. Funds are awarded on a competitive basis to universities, companies, and national laboratories.
g. Advanced Battery Loans and Grants: $2 billion for the Advanced Battery Loan Guarantee and Grants Program, to support U.S. manufacturers of advanced vehicle batteries and battery systems. America should lead the world in transforming the way automobiles are powered.
h. Home Weatherization for Low Income Home Owners: $5 billion to help low-income families reduce their energy costs by weatherizing their homes and make our country more energy efficient.
• Benefits for Pennsylvania:
o $258.8 million through the Weatherization Assistance Program
i.    Smart Appliances: $300 million to provide consumers with rebates for
buying energy efficient Energy Star products to replace old appliances, which will lower energy bills.
j.    GSA Federal Fleet: $300 million to replace older vehicles owned by the
federal government with alternative fuel automobiles that will save on fuel costs and reduce carbon emissions.
k. Electric Transportation: $400 million for a new grant program to encourage electric vehicle technologies.
l. Cleaning Fossil Energy: $2.4 billion for carbon capture and sequestration technology demonstration projects. This funding will provide valuable information necessary to reduce the amount of carbon dioxide emitted into the atmosphere from industrial facilities and fossil fuel power plants.

m. Tax Incentives for Renewable Energy and Energy Efficiency to Spur Energy Savings and Create Green Jobs ($20 billion over 10 years)

Treasury Department energy grants in lieu of tax credits. Under current law, taxpayers are allowed to claim a production tax credit for electricity produced by certain renewable energy facilities and an investment tax credit for certain renewable energy property. These tax credits help attract private capital to invest in renewable energy projects. Current economic conditions have severely undermined the effectiveness of these tax credits. As a result, the bill would allow taxpayers to receive a grant from the Treasury Department in lieu of tax credits. This grant will operate like the current-law investment tax credit. The Treasury Department will issue a grant in an amount equal to thirty percent (30%) of the cost of the renewable energy facility within sixty days of the facility being placed in service or, if later, within sixty days of receiving an application for such grant. This proposal is estimated to cost $5 million over 10 years.
Long-term extension and modification of renewable energy production tax credit. The bill would extend the placed-in-service date for wind facilities for three years (through December 31, 2012). The bill would also extend the placed-in-service date for three years (through December 31, 2013) for certain other qualifying facilities: closed-loop biomass; open-loop biomass; geothermal; small irrigation; hydropower; landfill gas; waste-to-energy; and marine renewable facilities. This proposal is estimated to cost $13.143 billion over 10 years.
Repeal subsidized energy financing limitation on the investment tax credit. Under current law, the investment tax credit must be reduced if the property qualifying for the x credit is also financed with industrial development bonds or through any other Federal, State, or local subsidized financing program. The bill would repeal this subsidized energy financing limitation on the investment tax credit in order to allow businesses and individuals to qualify for the full amount of the investment tax credit even if such property is financed with industrial development bonds or through any other subsidized energy financing. The cost of this proposal is included in the estimated cost of the next provision.
Removal of dollar limitations on certain energy credits. Under current law, businesses are allowed to claim a thirty percent (30%) tax credit for qualified small wind energy property (capped at $4,000). Individuals are allowed to claim a thirty percent (30%) tax credit for qualified solar water heating property (capped at $2,000), qualified small wind rty (capped at $500 per kilowatt of capacity, up to $4,000), and qualified geothermal heat pumps (capped at $2,000). The bill would repeal the individual dollar caps. As a result, each of these properties would be eligible for an uncapped thirty percent (30%) credit. This proposal is estimated to cost $872 million over 10 years.
Clean renewable energy bonds (“CREBs”). The bill authorizes an additional $1.6 billion of new clean renewable energy bonds to finance facilities that generate electricity from the following resources: wind; closed-loop biomass; open-loop biomass; geothermal; small irrigation; hydropower; landfill gas; marine renewable; and trash combustion facilities. This $1.6 billion authorization will be subdivided into thirds: 1/3 will be available for qualifying projects of State/local/tribal governments; 1/3 for qualifying projects of public power providers; and 1/3 for qualifying projects of electric cooperatives. This proposal is estimated to cost $578 million over 10 years.
Qualified energy conservation bonds. The bill authorizes an addition $2.4 billion of qualified energy conservation bonds to finance State, municipal and tribal government programs and initiatives designed to reduce greenhouse gas emissions. The bill would also clarify that qualified energy conservation bonds may be issued to make loans and grants for capital expenditures to implement green community programs. The bill also clarifies that qualified energy conservation bonds may be used for programs in which utilities provide ratepayers with energy-efficient property and recoup the costs of that property over an extended period of time. This proposal is estimated to cost $803 million over 10 years.

Tax credits for energy-efficient improvements to existing homes. The bill would extend the tax credits for improvements to energy-efficient existing homes through 2010. Under current law, individuals are allowed a tax credit equal to ten percent (10%) of the amount paid or incurred by the taxpayer for qualified energy efficiency improvements installed during the taxable year. This tax credit is capped at $50 for any advanced main air circulating fan, $150 for any qualified natural gas, propane, oil furnace or hot water boiler, and $300 for any item of energy-efficient building property. For 2009 and 2010, the bill would increase the amount of the tax credit to thirty percent (30%) of the amount paid or incurred by the taxpayer for qualified energy efficiency improvements during the taxable year. The bill would also eliminate the property-by-property dollar caps on this tax credit and provide an aggregate $1,500 cap on all property qualifying for the credit. The bill would update the energy-efficiency standards of the property qualifying for the credit. This proposal is estimated to cost $2.034 billion over 10 years.
Tax credits for alternative refueling property. The alternative refueling property credit provides a tax credit to businesses (e.g., gas stations) that install alternative fuel pumps, such as fuel pumps that dispense E85 fuel, electricity, hydrogen, and natural gas. For 2009 and 2010, the bill would increase the 30% alternative refueling property credit for businesses (capped at $30,000) to 50% (capped at $50,000). Hydrogen refueling pumps would remain at a 30% credit percentage; however, the cap for hydrogen refueling pumps will be increased to $200,000. In addition, the bill would increase the 30% alternative refueling property credit for individuals (capped at $1,000) to 50% (capped at $2,000). This proposal is estimated to cost $54 million over 10 years.

Plug-in electric drive vehicle credit. The bill modifies and increases a tax credit passed into law at the end of last Congress for each qualified plug-in electric drive vehicle placed in service during the taxable year. The base amount of the credit is $2,500. If the qualified vehicle draws propulsion from a battery with at least 5 kilowatt hours of capacity, the credit is increased by $417, plus another $417 for each kilowatt hour of battery capacity in excess of 5 kilowatt hours up to 16 kilowatt hours. Taxpayers may claim the full amount of the allowable credit up to the end of the first calendar quarter in which the manufacturer records its 200,000th sale of a plug-in electric drive vehicle. The credit is reduced in following calendar quarters. The credit is allowed against the alternative minimum tax (AMT). The bill also restores and updates the electric vehicle credit for plug-in electric vehicles that would not otherwise qualify for the larger plug-in electric drive vehicle credit and provides a tax credit for plug-in electric drive conversion kits. This proposal is estimated to cost $2.002 billion over 10 years.
Addition of permanent sequestration requirement to CO2 capture tax credit. Last year, Congress provided a $10 credit per ton for the first 75 million metric tons of carbon dioxide captured and transported from an industrial source for use in enhanced oil recovery, and $20 credit per ton for carbon dioxide captured and transported from an industrial source for permanent storage in a geologic formation. Facilities were required to capture at least 500,000 metric tons of carbon dioxide per year to qualify. The bill would require that any taxpayer claiming the $10 credit per ton for carbon dioxide captured and transported for use in enhanced oil recovery must also ensure that such carbon dioxide is permanently stored in a geologic formation. This proposal is estimated to have a negligible revenue effect.
Parity for transit benefits. Current law provides a tax-free fringe benefit employers can provide to employees for transit and parking. Those benefits are set at different dollar amounts. This provision would equalize the tax-free benefit employers can provide for transit and parking. The proposal sets both the parking and transit benefits at $230 a month for 2009, indexes them equally for 2010, and clarifies that certain transit benefits apply to federal employees. This provision is estimated to cost $192 million over ten years.

IX.  Miscellaneous Additional Provisions

Medicare and Medicaid Regulations: The bill extends the moratorium on Medicaid and Medicare regulations. The bill extends moratoria on Medicaid regulations for targeted case management, provider taxes, and school-based administration and transportation services through June 30, 2009.  The bill also adds a moratorium on the Medicaid regulation for hospital outpatient services through June 30, 2009.  The provision includes a Sense of Congress that the Secretary of HHS should not promulgate regulations concerning payments to public providers, graduate medical education, and rehabilitative services.  These provisions are estimated to cost $105 million.

o Buy American: Mandates that steel used in construction and repair projects funded under the bill be produced in the United States unless found to be prohibitively expensive.
o Davis Bacon: Requires that federal contractors and subcontractors pay workers no less than the local prevailing wage.
X.  American Recovery and Reinvestment Act: Benefits for Pennsylvania
Job-Creating Investments for Pennsylvania
 $1.6 billion through the State Fiscal Stabilization Fund to local school districts and public colleges and universities in addition to incentive grants as a reward for meeting key education performance measures and additional funding for other high priority needs such as public safety and other critical services, which may include education
 $426.6 million for Special Education Part B State Grants to help improve educational outcomes for individuals with disabilities, raising the federal contribution to nearly 40 percent, the level established when the law was authorized more than 30 years ago
 $25.4 million in education technology funds to purchase up-to-date computers and software and provide professional development to ensure the technology is used effectively in the classroom
 $523.8 million for Title I Education for the Disadvantaged to help close the achievement gap and enable disadvantaged students to reach their potential
 $15.4 million in State Employment Service Grants to match unemployed individuals to job openings through state employment service agencies and allow Pennsylvania to provide customized reemployment services
 $34.4 million in Dislocated Workers State Grants, particularly for grants that support immediate strategies for regions and communities to meet their need for skilled workers, as well as longer-term plans to build targeted industry clusters with better training and a more productive workforce
 $16.7 million for Department of Labor’s Adult State Grants
 $41.1 million for Department of Labor’s Youth State Grants
 $20.9 million for Vocational Rehabilitation to help individuals with disabilities prepare for and sustain gainful employment
 $66.2 million through the Drinking Water State Revolving Fund to address the backlog of drinking water infrastructure needs
 $157.6 million through the Clean Water State Revolving Fund to address the backlog of clean water infrastructure needs
 $1 billion in Highway Funding to be used on activities eligible under the Federal-aid Highway Program’s Surface Transportation Program and could also include rail and port infrastructure activities at the discretion of the states
 $343.7 million in Transit Formula Funding for investments in mass transit
 $213.2 million through the Public Housing Capital Fund to enable local public husing agencies to address a national $32 billion backlog in capital needs – especially those improving energy efficiency in aging developments – in this critical element of the nation’s affordable housing infrastructure
 $95 million in HOME Funding to enable state and local government, in partnership with community-based organizations, to acquire, construct, and rehabilitate affordable housing and provide rental assistance to poor families
 $90.4 million through the Homelessness Prevention Fund to be used for prevention activities, which include: short or medium-term rental assistance, first and last month’s rental payment, or utility payments. As such, most of this funding will go directly into the economy of local communities, as the funds will be used to pay housing and other associated costs in the private market
 $100.8 million through the State Energy Program
 $258.8 million through the Weatherization Assistance Program
 $3.4 million for National School Lunch Program Equipment Assistance
 $4 million through the Emergency Food Assistance Program
 $754.1 million in Supplemental Nutrition Assistance Program benefits (formerly Food Stamps)
 $3.8 million for the Emergency Food and Shelter Program, which provides grants to nonprofit and faith-based organizations at the local level to supplement their programs for emergency food and shelter to provide for the immediate needs of the homeless
 $60.1 million in Child Care and Development Block Grants to provide quality child care services for in low-income families who increasingly are unable to afford the high cost of day care
 $22.9 million for Head Start to allow additional children to participate in this program, which provides development, educational, health, nutritional, social and other activities that prepare children to succeed in school
 $42.6 million in Community Services Block Grants to local community action agencies for services to the growing numbers of low-income families hurt by the economic crisis, such as housing and mortgage counseling, jobs skills training, food pantry assistance, as well as benefits outreach and enrollment
 $2 million for Senior Meals Programs to help senior meals programs cope with steep increases in food and fuel costs. Many programs are reducing meal deliveries to seniors or closing meal sites
 $73.2 million in Byrne/JAG grants to support law enforcement efforts
 $1 million in Internet Crimes Against Children Grants to help law enforcement agencies enhance their investigative response to offenders who use the Internet, online communication systems, or other computer technology to sexually exploit children
 $6.4 million in Violence Against Women Grants for victim services programs to improve the criminal justice system’s response to violent crimes against women and to assist victims of domestic violence, dating violence, sexual assault and stalking who are in need of transitional housing, short-term housing assistance, and related support services

Extended Unemployment Insurance for Pennsylvania
 Unemployment in Pennsylvania stood at 6.7 percent in December 2008 (the last month for which we have data). The Department of Labor estimates that Pennsylvania could receive $275 million in new funding if Pennsylvania fully enacts the UI modernization incentives that the legislation would provide.
 According to the National Employment Law Project, this means that an additional $100 in unemployment insurance benefits will be offered to approximately 1.1 million Pennsylvania workers who have lost their jobs in this recession.

Tax Relief for Pennsylvania Families and Small Businesses
 Up to $400 for workers (or $800 for married couples) in the new Making Work Pay Tax Credit for 4.9 million Pennsylvanian workers and their families.
 $250 to Social Security beneficiaries, SSI recipients, and disabled veterans
 $2,500 for 138,000 additional families in Pennsylvania that will qualify for the new American Opportunity Tax Credit that makes college more affordable for 3.8 million families nationwide.
 Extended Bonus Depreciation and Small Business Expensing through 2009, allowing businesses that make capital investments to immediately deduct one-half the cost. Small businesses can immediately deduct 100 percent of the cost of these investments
 The American Recovery and Reinvestment Act of 2009 would protect over 26 million working families across the nation from the Alternative Minimum Tax, representing thousands of dollars in additional income taxes. According to the Congressional Research Service, 972,000 Pennsylvanians would be protected from the Alternative Minimum Tax in 2009.

 

Benefits for 7th District School Districts

 Title 1-A* IDEA, Part B^ Total
Chester-Upland School District $3,563,000 $2,259,000 $5,822,000
Chichester School District $373,000 $886,000 $1,259,000
Garnet Valley School District   $693,000 $693,000
Great Valley School District   $866,000 $866,000
Haverford Township School District   $1,579,000 $1,579,000
Interboro School District $326,000 $878,000 $1,204,000
Marple Newtown School District $207,000 $1,092,000 $1,299,000
Norristown Area School District $1,258,000 $1,936,000 $3,194,000
Penn-Delco School District $181,000 $787,000 $968,000
Phoenixville Area School District   $892,000 $892,000
Radnor Township School District   $793,000 $793,000
Ridley School District $433,000 $1,380,000 $1,813,000
Rose Tree Media School District   $1,072,000 $1,072,000
Southeast Delco School District $867,000 $1,273,000 $2,140,000
Spring-Ford Area School District   $1,205,000 $1,205,000
Springfield School District   $867,000 $867,000
Tredyffrin-Easttown School District   $1,291,000 $1,291,000
Unionville-Chadds Ford School District   $808,000 $808,000
Upper Darby School District $2,596,000 $3,357,000 $5,953,000
Upper Merion Area School District $163,000 $805,000 $968,000
Wallingford-Swarthmore School District   $725,000 $725,000
West Chester Area School District   $3,228,000 $3,228,000
William Penn School District $1,341,000 $1,720,000 $3,061,000
   

Notes: These are estimated grants only.  These estimates are provided solely to assist in comparisons of the relative impact of alternative formulas and funding levels in the legislative process.  It is ultimately the responsibility of the Department of Education and states to subgrant funds to LEAs.  These estimates are not intended to predict specific amounts LEAs will receive.  Details may not add to totals due to rounding.

* Title I-A: H.R. 1 provides an appropriation of $10 billion in addition to amounts that would be providded under a separate FY2009 appropriation measure.  Of this amount, 1% is set aside for the outlying areas and BIA.  The remaining funds are split evenly between the targeted grant and education finance incentive grant (EFIG) formulas.  Estimates grants to LEAs were prepared using the underlying factors used to calculate FY2008 Title I-A grants.  Actual data used to grant funds to LEAs will differ

^ IDEA: H.R. 1 provides an appropriation of $11.3 billion for sec. 611 in addition to amounts that would be provided under a separate FY2009 appropriations measure.  For these estimates, it is assumed that amounts reserved for state administration and state-level activities; and amounts required for LEA base payments come from the amount seperately appropriated for FY2009.  It is also assumed that no LEAs would be subject to allocations below the amounts they and poverty data specified in sec. 611(f).  Actual data used to subgrant funds to LEAs will differ.

Born and raised in Delaware County, former 3-star Admiral Joe Sestak served in the Navy for 31 years and now serves as the Representative from the 7th District of Pennsylvania. He led a series of operational commands at sea, including Commander of an aircraft carrier battle group of 30 U.S. and allied ships with over 15,000 sailors and 100 aircraft that conducted operations in Afghanistan and Iraq. After 9/11, Joe was the first Director of "Deep Blue," the Navy's anti-terrorism unit that established strategic and operations policies for the "Global War on Terrorism." He served as President Clinton's Director for Defense Policy at the National Security Council in the White House, and holds a Ph.D. in Political Economy and Government from Harvard University.  According to the office of the House Historian, Joe is the highest-ranking former military officer ever elected to the Congress.

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